BT Group share price outlook amid elevated headwinds

BT Group share price has remained in a tight range in the past few months as investors assess the recent developments and their impact on its business. It was trading at 182p on Tuesday, a few points below the year-to-date high of 189.45p. So, what next for the shares?

BT Group is facing major headwinds 

BT Group, a top telecom company, is facing major headwinds as competition in the industry rises and its business segment woes continue.

The company’s competition from popular companies like Vodafone, which merged with Three, Virgin Media, and TalkTalk.

Its business segment has been a major disappointment, with its revenue continuing to weaken because of its legacy voice business. The most recent results showed that the segment’s revenue dropped by 2% in the half year to £2.58 billion, continuing a trend that has been going on for years.

BT Group’s other business has continued to slow as woes in its broadband business continued. Its broadband users have been falling, with the management estimating that it had over 900,000 losses last year, which the management attributed to competition and a weak market.

The company’s consumer business continued to weaken, with its revenue falling by 3% to over £4.6 billion, while its international segment revenue dropped by 9%.

The management, led by Alison Kirby, has taken measures to offset the ongoing weakness in its business. She is cutting costs, exiting its unprofitable businesses, and increasing its focus on the UK.

For example, the management recently sold its US federal unit to 22nd Century Technologies as it sought to simplify its business.

City analysts believe that its business continued slowing down in the third quarter of last year. The most recent consensus shows that its upcoming results will show that its sales dropped by 2.1% in the third quarter to £5.07 billion, while its EBITDA dropped by 1.1% to £2.08 billion.

BT Group’s annual revenue will come in at £19.8 billion, down by 3.4%, while its EBITDA retreated to £8.2 billion.

The ongoing slowdown will likely continue slowing down in the coming years as competition from other companies and customer losses in its broadband business continues.

BT Group share price technical analysis 

BT Group stock price chart | Source: TradingView 

The daily timeframe chart shows that the BT Group stock price crashed from a high of 215p in August last year to a low of 170p on November 25.

It then started moving upwards, forming an ascending channel and reaching a high of 188p on January 22nd. This was its highest level since September 30th last year.

BT stock price remains above the Supertrend indicator and the 50-day Exponential Moving Average (EMA).

Therefore, the most likely scenario is where the stock resumes rising, potentially to the key resistance level at 200p. This view will be confirmed if it moves above the upper side of the channel.

On the other hand, a move below the lower side of the ascending channel will invalidate the bullish outlook and point to more downside, potentially to the key support level at 170p, which is about 7% below the current level.

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