The BT share price tanked 15% but analysts say it can rebound to £…

The BT (LSE: BT.A) share price is trapped in an ugly short-term downtrend at the moment. Over the last two months, it has fallen about 15%.

City analysts seem to believe there’s scope for a rebound, however. Here’s a look at where they see it going in the medium term.

Why are the shares down?

It’s hard to know exactly why BT shares have fallen over the last two months.

It could be related to growth concerns. Recently, one research firm downgraded the stock from Buy to Neutral on the back of concerns that the UK physical broadband line market (in which BT is a big player) is shrinking for the first time due to the impact of other types of internet such as Fixed Wireless Access (FWA), mobile hotspots, and satellite broadband (think Starlink).

Alternatively, it could be related to the company’s large debt pile (net debt was about £20bn at the end of March). With UK interest rates remaining relatively high, the company is going to be looking at substantial interest payments in the near term and these could slow profit growth.

High interest rates may have also led investors to shift out of dividend stocks like BT (its yield is about 4.6% today) and into government bonds. Relative to stocks, bonds are lower-risk investments.

Of course, it could just be some ‘garden-variety’ profit-taking. Between May 2024 and July 2025 this stock ran up from around £1.05 to £2.20 – after that kind of move some profit-taking wouldn’t be unusual.

The average price target for BT today

Whatever the reason, analysts seem to think that the share price has fallen too far. Currently, the average price target for the stock is 203p.

That’s about 12% above the current share price. Add in the 4.6% dividend yield and investors could be looking at solid returns if the price target was to be hit in the next 12 months (it may not be, of course).

A good investment?

Is the stock worth a look then? Well, it could be if someone is looking for a solid, unadventurous stock that pays healthy dividends.

It’s certainly not expensive today. Currently, the forward-looking price-to-earnings (P/E) ratio is only about 10 (versus the FTSE 100 average of about 13).

That said, I can’t help but feel that there are much better opportunities to consider in the market today. Taking a five-year view, I think there will be a lot of shares that provide higher returns for investors than BT.

I reckon it could pay to look for companies that are generating a bit more revenue and earnings growth (BT is really struggling to grow its top line right now), that have strong competitive advantages, and that have rock-solid balance sheets. If someone can find companies like this that are trading at reasonable valuations, they should do well in the long run.

The post The BT share price tanked 15% but analysts say it can rebound to £… appeared first on The Motley Fool UK.

More reading

• At under £2, is the BT share price a no-brainer buy sign?
• How an investor can prepare for a potential FTSE 100 market crash
• Here’s the dividend forecast for BT shares through to 2028!
• BT’s share price is tipped to rise 11% over the next year! Can it?
• Could the BT share price take off?

Edward Sheldon has no positions in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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