The BT share price is up 60% in a year! Can it continue to climb?

| February 28, 2022

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5G technology accelerating speeds

  • The BT share price has gone from the lows of 98.7p to the peak of 204p
  • New strategic partnerships with Sky and Discovery, Inc.
  • BT Group has invested £30m in a tech startup to kick start digital transformation

The BT Group (LSE:BT-A) share price has had a pretty impressive run in recent months. With over 14 million customers, BT is the UK’s largest mobile and fixed communication solutions provider. The £19bn company has its network spread across 180 countries.

The broadband network provider came under the limelight when the BT share price shot from 100p, in November 2020, to 204p in June 2021. But can the BT share price continue to climb? Let’s discuss.

The BT share price performance

BT’s share price journey has seen multiple trenches and peaks in the past three years. Currently, the stock is trading at 185p.

The BT share price caught investor attention when it rose by almost 60% in less than a year. And in 2022, that upward momentum seems to be continuing with the stock up by nearly 10% over the last two months.

Moving ahead, the telecom network provider is progressing and growing towards increased market share. In fact, the company was able to achieve a 37% increase in Fibre To The Premises (FTTP) connections during the third quarter of its 2022 fiscal year. Moreover, the 5G build is also on track and now covers over 40% of the UK’s population.

Despite the supply chain challenges and delays due to Covid-19, the company reported a 2% growth in EBITDA. Even though revenue declined by 2%, as per the quarterly earnings report, the future holds new prospects. The recent strategic partnerships with Sky and Discovery, Inc. could offer a wide array of choices to existing and new customers.

Shortcomings of the company

No doubt, the future of BT Group seems promising with these new joint ventures. But while looking at the balance sheet, the huge debt figure is concerning to me as an investor. According to the recent quarterly report, Net Debt was reported at £17.7bn.

Moving ahead, the rising interest rates in the post-pandemic period will leave the company struggling with debt repayment, in my opinion. Needless to say, this could have a substantial impact on profit margins while debt levels remain elevated. And this could put a damper on the BT share price growth potential.

New and progressive investments

The network provider is keenly focusing on laying grounds for a prospective future. For this, the company has invested £30m in a tech startup. This tech startup supports developers specialising in artificial intelligence and cloud computing. I believe this investment will accelerate the long-overdue digital transformation within the company.

What’s more, BT is investing another £15bn to upgrade 25 million homes and businesses to full-fibre by 2026. In my opinion, both these investments could yield multi-fold returns over the long term, potentially sending the BT share price surging.

Final thoughts on the BT share price

The BT share price has made an excellent comeback following the pandemic crash in 2020. But the volatility in price is something to be mindful of. After all, management is placing some big bets with its investments. And if these don’t pay off, it could leave the firm in a vulnerable position.

Personally, I think the company could have a bright future ahead. And that’s why I believe the stock will continue to trend upward throughout the rest of 2022.

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Saima Naveed does not own shares in any of the companies mentioned. The Money Cog has no position in any of the companies mentioned at the time of writing. Views expressed on the companies and assets mentioned in this article are those of the writer and therefore may differ from the opinions of analysts in The Money Cog Premium services.