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BT (LSE: BT.A) shares have smashed the FTSE 100 over the previous 12 months, climbing a staggering 60%. It hurts me to jot down that, as a result of I flagged the telecoms big a number of occasions final yr as a restoration play to think about.
Sadly, I failed so as to add it to my very own Self-Invested Private Pension (SIPP). That oversight’s been a pricey one.
On the time, BT shares seemed low cost as chips, buying and selling at round six occasions earnings whereas providing a dividend yield north of 6%.
Can this worth inventory proceed to win?
BT has continued to do nicely in 2025. An funding of £10,000 when markets opened in January would now be seeing a 15.5% acquire at present, with that stake now value £11,550. That’s an additional £1,550 in just below 4 months. So can it proceed to flourish?
Encouragingly, the BT share value stil doesn’t look overly costly, buying and selling at round 9 occasions earnings. So there’s potential worth right here.
The yield has slipped to 4.75%, however that’s purely as a result of the share value has raced forward. Analysts reckon it might edge again as much as 4.86% this yr and 4.95% in 2026, because the board hikes dividends. That’s nonetheless respectable.
The consensus one-year share value goal from 15 brokers is 192.2p. That’s a 13% premium to at present’s 169.4p. Mixed with dividends, that implies a possible whole 12-month return approaching 18%. That’s clearly a extra pedestrian tempo than final yr’s fireworks, however not too shabby. Clearly, forecasts can’t be relied upon, however this one displays how I view the outlook.
There are nonetheless causes to tread fastidiously. BT carries a hefty £20bn web debt, and with rates of interest nonetheless excessive servicing that’s pricey. Plus it additionally has that burdensome pension scheme.
Competitors additionally stays fierce as BT faces rivals akin to Virgin Media O2, Vodafone and Sky throughout broadband, cell and TV.
In the meantime, its Openreach full-fibre broadband roll-out has made nice good points. In Q3, BT added a web 472,000 fibre clients and now boasts a 35% take-up charge. Nevertheless, holding clients loyal is a continuing battle, as whole broadband traces fell by 208,000 over the quarter.
Dividends, development and hope
That stated, BT’s made spectacular strides below new boss Allison Kirkby. Many had been sceptical as she grew to become the most recent CEO to announce a bunch overhaul, however she’s quietly defied expectations.
Her push to focus BT on the UK appears more and more prescient as corporations worldwide reassess the dangers of sprawling international operations, amid commerce issues.
Progress is clearly seen. Shopper service income returned to development in Q3. Price financial savings helped push adjusted EBITDA up 4% to £2.1bn.
Kirkby’s steadied a leaky and directionless ship, and BT shares might nonetheless have additional to go. Nevertheless, debt and pension challenges stay and it feels to me as if the large good points have now been made. Though I stated that at the beginning of 2025, and the shares have defied international inventory market volatility to climb steadily.
However I gained’t purchase BT shares. It appears like I missed my probability a yr in the past. As a substitute, I’ll hunt for the subsequent massive FTSE 100 restoration play, reasonably than the final one. And this time I’ll put my cash the place my mouth is.
