The BT Group (LSE:BT.A) share price has been on a great run over the last 12 months, rising by almost 50%. That’s a welcome change of pace as it was only a few years ago that investors were jumping ship on fears of an overleveraged balance sheet.
Today, sentiment’s improved drastically. While debt remains a significant challenge, management’s seemingly making the right moves to tackle it. With operational milestones being hit, paired with an incoming surge to free cash flow generation, investors are placing bullish bets on this enterprise.
So can the company deliver? Let’s explore where the BT share price could end up over the next 12 months.
Righting the ship
Since Allison Kirkby became the new leader of BT in February 2024, the stock’s risen by 46%. This upward trajectory is partly down to the stock being priced so cheaply when her tenure kicked off. But there’s no denying she’s having a positive impact on the business.
Looking at the group’s third-quarter trading update (ending in December), BT’s rollout of fibre-to-the-premises (FTTP) has surpassed 1m homes for four quarters in a row. That’s a critical achievement since a leading reason why customers have walked out of the door is a lack of fibre internet options. Subsequently, BT’s fibre customer count has jumped 33%, reaching 3.2m.
Encouragingly, customer experience has also been improving. BT’s net promoter score – a gauge of how likely a customer would recommend a product or service, climbed by four points to 29.6. That still puts the company behind the industry average of 31. However, if BT continues to take the proper steps, that could change throughout 2025.
Overall, BT’s revenue and profits have yet to start delivering meaningful growth. Yet, Kirkby seems to be plugging the holes and filling the cracks, giving the business a solid foundation to jump back into growth mode.
12-month share price target
There are currently 21 institutional analysts following this business, 13 of which have recommended the stock as either a Buy or Outperform. When looking at the share price forecasts, one analyst believes the stock could rise to as high as 299p by this time next year. That’s an 84% potential jump if investors buy shares today!
As exciting as that sounds, it’s important to remember that forecasts are based on certain assumptions. In this case, it predicts the company can successfully deliver on its promise of £2bn of free cash flow by 2027, followed by £3bn by 2030. That’s a notable increase from the £1.5bn expected to be delivered in its 2025 fiscal year.
Despite the encouraging progress made, not all analysts are convinced. Those with a Sell rating on the stock believe the BT share price could actually fall to as low as 110p in the next 12 months – a 32% drop. While bleak, this outlook isn’t entirely unfounded. Should the company fail to improve cash flow margins, the debt burden will likely only get worse. After all, there’s £23.6bn of outstanding debts & equivalents to pay off.
In other words, BT’s share price performance seems tied to Kirkby’s. If she can deliver, this once-loved UK stock could regain its popularity. But there’s still a long road ahead. Personally, I want to see more progress before throwing any money into the ring.
