EQUITY RESEARCH: BT GROUP PLC

This report presents the valuation of BT Group PLC as a Master's in Finance Final Work Project at ISEG. It follows the equity research format recommended by the CFA Institute. BT Group PLC was selected due to its position as one of the major players in the telecom communications industry, which operates in many countries worldwide. The author had an interest in studying the industry in-depth. The study considers publicly available information concerning the company as of 31st September 2022, such as company reports, Thomson Reuters, Bloomberg L.P., and yahoofinance.com. The target price (TP) is based on the Discounted Cash Flow method, complemented with the Adjusted Present Value, the Discounted Dividend Model, and the Relative Valuation. The final recommendation is BUY, with a target price of £ 1.58/share 2023YE and a 31.3% upside potential as of 29th November 2022 with medium risk assessed. The expected revenue growth and increased profitability support this recommendation during the forecast period, especially in the consumer sector. The evolution of Covid-19 and inflationary pressure across the world are vital risks impacting the target price, which acts the company on an operational level along with the uncertainty of the global macroeconomic outlook by influencing the average revenue per user (ARPU).