Credit Suisse revises price target for BT, keeps 'outperform' rating

26th Jun 2015 09:48

Credit Suisse has reiterated an 'outperform' rating for BT and raised its price target from 495p to 510p.Analysts said in a note they expected the BT-EE merger to be approved and said forced a spin-off of BT's wholesale broadband division OpenReach was unlikely.BT is attractively valued against the rest of the sector, CreditSuisse said.Analysts raised earnings targets for the telco for the years ended March 2016-19 by 1-2 to reflect a BT sport price increase, and slightly larger price increases across the UK market.CreditSuisse said Ofcom was unlikely to force the spin-out of OpenReach because the regulator's own price analysis showed the UK market is competitive, and BT only had a relatively low broadband market share of 32%."Any decision by Ofcom would have to be proportionate under European Union law and stand up to scrutiny from the European Commission and legal challenge."There does not seem the evidence to us of market failure needed to justify such an extreme move," the forecaster said in a note.Shares in BT traded down 0.09% to 461.60p on Friday at 10:07.