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FTSE climbs on UK construction news and ahead of US jobs, but BT drops

Discussion in 'Market News' started by Lily, Sep 2, 2016.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
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    Telecoms group hit by downgrade on competition and regulation concerns

    Leading shares are moving higher at the end of the shortened trading week, following better than expected UK construction figures and ahead of the US employment figures later.

    But BT is bucking the positive trend, down 5.45p at 381.15p as JP Morgan cuts its price target from 490p to 440p and its recommendation from overweight to neutral. The broker, said BT faced a number of headwinds including increased competition, convergence and regulation.

    We understand that one of BT’s brokers downgraded the stock last night citing numerous headwinds for its share price in the next few years. We disagree with the vast majority of the bear arguments put forward by this broker. BT remains our top pick.

    [On competition] we strongly doubt Sky plan to invest in building Britain more fibre infrastructure.

    The group’s opportunities have not diminished (sales pipeline remains substantial) and we believe the medium-term growth outlook remains very healthy... However, we recognise that today’s news is disappointing and that steps will have to be taken to rebuild investor confidence.

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