(Sharecast News) - Citi reiterated its 'buy' rating on BT Group on Monday and added the shares to its 'European Focus List', "because of its deep value, and as it is a clear beneficiary from improving regulatory and market conditions".
The bank noted that BT is doubling down on its strategy of building and connecting fibre to the home at pace and not limiting that to any free cash flow targets, which as a result are coming under some pressure.
"But this is temporary and in the meantime BT is delivering EBITDA growth, despite opex headwinds which should partly reverse from FY25 (energy)," it said.
"As such the asset quality is improving, core earnings are well supported and growing, while capex is at its peak and way above any other major European telco due to BT's rapid deployment and full transparency on investment (no JVs or acquisitions of fibre)."
BT replaces Deutsche Telekom on the 'European Focus List'. Citi said it continues to rate the shares at 'buy' but has removed them from the list given the strong outperformance since March 2022 and a lack of short-term catalysts.
At 1010 BST, BT shares were up 2,6% at 148.73p.
BT (BT.A)