Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.
The BT Group’s full year results are in line with our expectations, adjusting for revenue of 20.4 billion GBP and EBITDA of 8.2 billion GBP each, up over 2%, 1%, respectively.
Why it matters: We are delighted that BT has raised its Fiber Buildout Target by 20% in 2026. In January, management showed 80% of the lines that BT lost in areas where there is no connection between textile and home. Accelerating the rollout should help BT protect its market share in broadband.
Continuing cost reductions allowed the BT Group to increase its EBITDA in 2025 despite looking at revenue contracts. Lower international and mobile phone sales were heavy on the top line.
Conclusion: We maintain our estimate of the GBX 190 fair value of narrow moat BT and believe that the stock is slightly undervalued.
Key statistics: The Premises line from the total openreach textiles increased 39% year-on-year to 6.5 million. With over 18 million FTTP lines, BT boasts a 36% adoption rate. Elsewhere, OpenReach lost 243,000 broadband lines in the fourth quarter.
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