Source: Sharecast
Citi considers consensus estimates for BT to be "too optimistic in the medium-term" on various metrics including revenue, consumer EBITDA, specific items, earnings per share, and normalised free cash flow.
"However, we anticipate none of the debates around these items to be resolved at the Q4 results on 21 May, when we expect BT to guide to 2026/27 EBITDA growth, whilst reiterating its target for circa £2bn normalised FCF," said Citi.
As such, while Citi reiterated its 'sell' rating on the stock due to the "structural challenges facing the UK telecoms market", it also acknowledged that BT's Q4 results were "unlikely to be a materially negative catalyst".
Citi also said its price target increase reflected the sector's recent re-rating by reducing the weighted average cost of capital used in its sum-of-the-parts methodology.
Reporting by Iain Gilbert at Sharecast.com