BT Group shares have been trading in a narrow range over the last few months, as investors evaluate the impact of recent events on the company’s business. On Tuesday it was at 182p, just a few pips below its year-to date high of 189.45p. What’s next for these shares?
BT Group faces major challenges
BT Group is a leading telecoms company that faces major challenges as the competition increases and business segments continue to struggle.
Competition from companies such as Virgin Media and TalkTalk, Virgin Media merged with Vodafone.
The business division has continued to struggle due to its legacy business in voice. Recent results show that revenue for the business segment fell by 2% to PS2,58 billion in half-year, continuing the trend of years.
BT Group has seen its other businesses continue to suffer as the broadband problems continued. The management estimates that its broadband users are falling. It attributed the decline to a lack of competition in the market and over 900,000.
Consumer business revenue fell by 3%, to more than PS4.6 billion. International segment revenue also dropped by 9%.
Alison Kirby’s management has implemented measures to counteract the business weakness. Alison Kirby is cutting back on costs and exiting unprofitable business, while increasing the focus of her company’s UK operations.
In order to streamline its business, for example, management sold 22nd Century Technologies its US Federal unit.
Analysts at City believe the company’s business continued to slow down during the third quarter last year. According to the latest consensus, its third-quarter results are expected to show a 2.1% drop in sales to PS5.07bn and a 1.1% decline in EBITDA to PS2.08bn.
BT Group will report a revenue of PS19.8 Billion, a decrease of 3.4%. Its EBITDA has also fallen to PS8.2 Billion.
As competition with other companies continues and as customers continue to leave its broadband service, the ongoing slowdown is likely to continue in coming years.
Technical analysis of the BT Group Share Price
Source: TradingView
Daily timeframe chart shows BT Group’s stock dropped from a peak of 215p last August to a minimum of 170p November 25, 2018.
The price then began to rise, creating an ascending channel. It reached a peak of 188p in January. It was at its highest since last September 30th.
The BT share price is still above both the Supertrend and 50-day Exponential Moving Average.
The most probable scenario would be that the stock continues to rise, possibly up to 200p, which is the main resistance level. If it crosses above the top of the channel, this view is confirmed.
A move below the bottom of the ascending slanted channel would invalidate this bullish view and indicate further downside. This could lead to the important support level, 170p which is approximately 7% lower than the current price.
As new information becomes available, this post BT Group Share Price Outlook amid Elevated Headwinds will be updated.
