BT shares (BT.A) shares hit a five-year high of 242p in May, having almost trebled since their lows of mid-2024.
Since then they’ve dropped by around 19%, trading near 192p as I write.
That’s a sizeable reversal for a stock that had been one of the FTSE 100’s stronger performers, and it raises an obvious question. Has something changed, or is this just a natural cooling after an unusually sharp run?
Berenberg’s view suggests little has changed for the worse, given the bank raised its price target from 250p to 300p after the full-year results in May and reaffirmed that figure in a note on 14 July, pointing to improving consumer trends and growing confidence in the fibre rollout.
A target of 300p would mean upside of around 53% from here, and that’s before factoring in a dividend yield of roughly 4.2%.
If Berenberg is right, the recent drop looks less like a red flag and more like an entry point that’s opened up after sentiment ran too hot in the spring.
Not every broker agrees, though. UBS carries a Sell rating with a 175p target, issued in May and still current, which would put the shares meaningfully lower than where they trade today, though that view sits apart from most of the pack, as brokers have generally been raising targets through 2026 rather than cutting them, with JPMorgan Cazenove’s now at 310p.
Fibre Rollout Progress Meets Revenue Challenges
The full year’s operational delivery leans towards the more optimistic camp, with full fibre build and 5G+ coverage both hitting their targets ahead of schedule, and the cost transformation programme has already banked £1.5bn of annualised savings, with the target just raised again to £3.7bn by FY30.
Yet the confident guidance sits alongside one awkward detail, in that revenue fell 3% to £19.65bn in the year to March 2026, so growth still rests almost entirely on cost cuts and fibre mix rather than the top line actually expanding.
Net debt tells a similarly static tale, having sat close to £20bn for years now, essentially unchanged despite all the transformation work elsewhere in the business.
BT’s Recovery Still Depends on Debt Reduction
A falling share price alongside flat revenue and flat debt is exactly the combination that would worry me if the pullback continues, because it would suggest the market is pricing in slower delivery rather than just taking a breather after a strong run.
For now, the balance of evidence still tips towards the latter explanation. Broker targets keep rising, the fibre build keeps beating its own schedule, and the dividend keeps being paid and grown.
But I wouldn’t call the drop from 242p a clear buying signal either. It looks more like the shares finding a fairer level after getting ahead of themselves, with the debt overhang still capping how much further that re-rating can realistically go until it starts to shrink.