Image source: BT Group plc
Few expected BT (LSE:BT.A) to deliver the market-beating share price gains we’ve seen in 2025. This is a FTSE 100 company with persistent sales troubles and a balance sheet packing lots of debt.
Yet the stock’s risen an impressive 22% in value so far this year. That beats the broader FTSE index‘s 17% rise over the period.
Can BT shares enjoy more substantial price gains in 2026? One especially bullish analyst does — in fact, they think the telecoms giant will surge 77% between now and next December, to 312p per share.
Is this just a fairy story? Or could the company surprise us again?
Great progress
The good news is BT’s efforts to strip out costs are paying dividends. At £1.2bn so far, savings over the last 18 months have soared above what experts expected, driving those share price gains.
The business has much further scope to impress too — it’s targeting £3bn of cost cuts alone under the current programme.
The excellent momentum over at its Openreach infrastructure unit is another reason for celebration. New fibre connections continue to tick along nicely, and on track to hit 25m by the end of this year.
This gives BT a springboard to capitalise on the fast-moving digital revolution. Openreach’s margins are the highest in the group too.
What could go wrong?
But let’s not get too carried away. While BT’s given investors reason to cheer, there remain a lot of problems the FTSE company still has to solve. A major one is how it can get revenues back into growth mode.
Sales keep crumbling as mentioned earlier, on a nasty blend of tough economic conditions and intense competition. It racked up 242,000 broadband line losses in the last quarter as its rivals hit a new gear.
For the six months to September, sales dropped across all units (bar Openreach) and down 3% at group level.
These pressures aren’t expected to ease any time soon, which would be bad news for any stock. When you consider the state of BT’s balance sheet, things become even more concerning.
Cash flows continue to underwhelm as sales struggle and capital expenditure grows (up 8% in H1). With it also having to plug its enormous pension deficit, the company’s net debt pile rose another £586m over the year to September, to £20.9bn.
Is BT a buy?
Taking everything into account, is BT a Buy to consider right now? I’m not so sure.
Okay, the company’s share price remains significantly higher than it was on 1 January. But market unease is growing, and its share price has slumped since late August.
Never mind the 77% price rise our bullish broker is forecasting. I think the stock could fall sharply in 2026 as top-line pressures continue to mount.
BT’s share price remains cheap, which value investors may say fairly reflects the firm’s problems. Its forward price-to-earnings (P/E) ratio is just 10.1 times. But I won’t be buying it for my portfolio.
This story originally appeared on Motley Fool
