Broker snap: Bit more upside for BT

13th Nov 2009 11:57

Telecoms group BT has doubled in value since its shares plunged to nearly 70p in March, but Nomura thinks they may have a little further to go.The Japanese broker has kept its 'neutral' rating on the stock, but raised its price target to 160p from 120p previously. "We expect the shares will continue to be well supported by the operational momentum, balanced by BT's need to invest in the business, reduce debt and support the pension scheme," it said.The broker still prefers BT over Vodafone, on which it has a 'reduce' rating.Yesterday, BT reported second quarter revenue in line with expectations and said it wants to cut costs by at least £1.5bn this year versus its old target of over £1bn. The company also predicts the decline in full-year revenue before one-off items will be 3-4%, slightly less than the 4-5% forecast previously. Revenue for the three months to 30 September dipped 3% to £5.12bn, or 6% excluding foreign exchange movements and acquisitions. Adjusted profit before tax fell 6% during the quarter to £461m and by 12% for the half-year to £888m, but it was 44% lower on a reported basis at £275m.