Will BT’s Share Price Double by 2026?
BT Group (LSE:BT.A) has made significant strides in 2025, with its share price climbing over 20% since January. This improvement comes after a challenging period starting in mid-2022. Investors are now wondering if the momentum will carry into 2026, potentially doubling the company’s market capitalization.
Key Developments Under New Leadership
The recent rise in BT’s share price coincides with the leadership of Allison Kirkby. Under her guidance, BT has undertaken various cost-saving measures, achieving £1.2 billion in annualized savings. Additionally, the company aims to deliver another £1.8 billion in savings.
Infrastructure Investments
Despite these savings, BT is heavily investing in its fiber-to-the-premises (FTTP) network and 5G mobile infrastructure. The company is approaching peak investment periods for both projects, which are crucial for future growth. Currently, BT provides FTTP service to 20.3 million of the UK’s approximately 30 million homes, while 66% of the population has access to 5G.
Potential Financial Impact
If BT can successfully complete these infrastructure upgrades, its capital expenditures are expected to decrease significantly. This, combined with ongoing cost reductions, could potentially result in a substantial increase in free cash flow. Improved cash flow would allow BT to address its long-term debt issues.
Concerns Among Investors
Investors remain cautious, particularly due to BT’s current debt levels. Strengthening its financial standing could lead to a re-evaluation from investors, similar to the resurgence observed with companies like Rolls-Royce.
Looking Ahead to 2026
Anticipating that BT’s share price could double by 2026 may be overly optimistic. Analysts suggest that a realistic target might be around 312p, which represents a 74% increase from current trading levels. Achieving this target will require more than just improved cash flow; revenue growth is also essential.
Challenges in Revenue Growth
Despite BT’s focus on rolling out 5G and fiber products, revenue growth has been challenging. The company faces intense competition and regulatory limitations that hinder pricing power. While upgrades from legacy products could bring opportunities, noticeable improvements have yet to appear.
Conclusion for Investors
There are no assurances that BT’s shares will double or even reach the 312p target by next year. Given BT’s inconsistent record on achieving targets, investors should approach with caution. However, for those willing to take a long-term view, BT shares may present an appealing opportunity as the company continues to implement positive changes.
