BT Group share price has remained under pressure, even as the FTSE 100 Index has jumped to a record high. It has dropped by 4% in the last six months, while the Footsie has jumped by 14%. This article explores what to expect this year.
BT Group share price technical analysis
The daily timeframe chart shows that the BT stock price has pulled back in the past few months. It has dropped from a high of 215p in August last year to the current 179p.
The stock has moved below the 50-day and 100-day Exponential Moving Averages (EMA). Dropping below these averages is a sign that bears have prevailed.
Most importantly, it has formed an ascending channel whose levels test the key support and resistance levels since November 25. This channel is part of the formation of the bearish flag pattern, a common bearish continuation sign.
It also remains below the Supertrend indicator, one of the most common bearish charts in technical analysis. Therefore, the most likely scenario is where it makes a bearish breakout, with the initial target being at 170.70, its lowest point in November. A drop below that price will point to more downside, potentially to the extreme oversold level at 162.5p.
On the flip side, a move above the upper side of the channel at 187p will invalidate the bearish outlook and point to more gains, potentially to the Major S/R Pivot Point at 200p.
BT share price chart | Source: TradingView
BT faces major headwinds
BT Group is making major milestones as the management continues to turn around its business. One of the approaches is to exit its international business, which will help it to refocus on the UK.
BT continued this process this week when it sold a specialized unit serving US federal institutions to 22nd Century Technologies. The deal will help the company focus on the UK and for BT International to operate as an independent unit.
The company is also cutting costs, a process that will accelerate in the coming years. It has laid off workers, and the management expects that its workforce will be much lower in the future. As a result, costs in the year’s first half dropped by 3% to £8.3 billion.
Additionally, capital expenditure will continue falling over time now that Openreach’s solutions are in most parts of the country.
On the other hand, BT Group’s finances show that its business is no longer growing as competition rises. Revenue dropped by 3% in the year’s first half because of the ongoing weakness in its legacy business.
Service revenue in the country fell by 1% as the legacy voice business coincided with the softer retail pricing. The company’s profit before tax also declined by 11% to £862 million.
City analysts expect that the company’s business to continue slowing down. The average estimate among analysts is that the company’s annual revenue in the FY’26 will be £19.82 billion, down from £20.3 billion a year earlier. They also expect the revenue to drop to £19 billion and £19.6 billion in the next two financial years.
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