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BT Share Price Flashes Signs Of Recovery

BT share price rose significantly on Friday, gaining 1.5 percent to close the day’s trading session at 105.10 p. The stock has been on a recovery path riddled with setbacks, but has gained about 0.1% in the last week. May, in particular, has been a good month for BT Shares, as their price has risen by 2.4%. However, the share price is still down by about 6% in the last month, underpinned by significant losses in April. Furthermore, it is about 17 percent below its YTD highs of 126.35 p.

In an announcement made last week, BT revealed that it intends to repurpose a number of its old street cabinets to serve as electric vehicle (EV) charging stations. Until now, the street cabinets are used to store broadband and phone cabling. However, as the world transitions to renewable energy, EV charging stations will be critical to that process, making this a potentially rewarding revenue stream for BT. The UK government targets to install at least 300,000 EV charging stations on UK streets by 2030, and BT successfully installed the first pilot EV charging station repurposed from a street cabinet in East Lothian, Scotland.

New BT CEO Allison Kirkby has quite a task in making BT more competitive, with the upgrading of old infrastructure central to that journey.  Also lined up is the sale of BT Ireland, the Group’s Irish unit.

Elsewhere, JP Morgan released a note last week stating that BT Share price, which it currently rates as “overweight” with a 290p price target, is heavily undervalued and ripe for re-rating. The bank points at three key areas of focus, namely: (1) The company’s growth prospects and nascent pricing power; (2) The competition shaping up around fibre altnet); and (3) The resulting post-fibre FCF outlook. Furthermore, it emphasizes the need for the company to start giving mid-term outlooks, stating that the payoffs from fiber investments could take some time to be realized. Such outlooks could potentially help build greater confidence in the stock.

Technical analysis

The buyers are currently in control and the BT share price currently pivots at 104.70. That is likely to propel the share price to the resistance at 105.55. A continuation of the momentum will likely break the resistance and potentially test 106.30. Alternatively, a move below 104.70 will favour the sellers to take control, with support coming in at 104.00. If the sellers retain their control at that point, they will likely break the support, which will invalidate the upside narrative. Furthermore, the resulting momentum could see the price head lower to test 103.30.