Broker snap: BT kept on 'hold'

17th May 2010 11:25

A move into profit at BT Group and a positive investor day has caused Standard & Poor's (S&P) to lift its target price on the telecoms giant, although there's "still some room for improvement".The broker maintained its 'hold' rating, but raised its target to 130p from 110p, "encouraged" by recent developments.Revenue estimates are left broadly unchanged, though adjusted EBIT forecasts for FY 11-FY 13E rise by about 15% on better-than-expected EBITDA guidance.Earnings per share estimates are increased by around 80% due to higher EBITDA and lower pension costs. "The uncertainty about the pension regulator review remains a key concern in our opinion, however, we believe the most likely outcome is an acceleration of the top up programme that in our view BT can manage without comprising its promise to grow the dividend," S&P analyst James Crawshaw said."Overall, we were encouraged by the results and analysts' day."