As of June 14, 2025, BT Group PLC has a Discounted Cash Flow (DCF) derived fair value of $248.86 per share. With the current market price at $184.05, this represents a potential upside of 35.2%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $251.72 |
| DCF Fair Value (10-year) | $248.86 |
| Potential Upside (5-year) | 36.8% |
| Potential Upside (10-year) | 35.2% |
| Discount Rate (WACC) | 4.8% - 6.4% |
Revenue is projected to grow from $20370 million in 03-2025 to $25754 million by 03-2035, representing a compound annual growth rate of approximately 2.4%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 03-2025 | 20370 | 2% |
| 03-2026 | 20499 | 1% |
| 03-2027 | 20449 | 0% |
| 03-2028 | 21322 | 4% |
| 03-2029 | 21947 | 3% |
| 03-2030 | 22386 | 2% |
| 03-2031 | 22834 | 2% |
| 03-2032 | 23291 | 2% |
| 03-2033 | 23757 | 2% |
| 03-2034 | 24398 | 3% |
| 03-2035 | 25754 | 6% |
Net profit margin is expected to improve from 5% in 03-2025 to 5% by 03-2035, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 03-2025 | 1054 | 5% |
| 03-2026 | 1061 | 5% |
| 03-2027 | 1058 | 5% |
| 03-2028 | 1103 | 5% |
| 03-2029 | 1136 | 5% |
| 03-2030 | 1158 | 5% |
| 03-2031 | 1181 | 5% |
| 03-2032 | 1205 | 5% |
| 03-2033 | 1229 | 5% |
| 03-2034 | 1262 | 5% |
| 03-2035 | 1333 | 5% |
with a 5-year average of $4945 million. Projected CapEx is expected to maintain at approximately 24% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 03-2026 | 4938 |
| 03-2027 | 4989 |
| 03-2028 | 4940 |
| 03-2029 | 4990 |
| 03-2030 | 5066 |
| 03-2031 | 5177 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 57 |
| Days Inventory | 10 |
| Days Payables | 131 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 2026 | 7323 | 282 | 4871 | 3432 | (1,261) |
| 2027 | 7368 | 281 | 4859 | 51 | 2177 |
| 2028 | 7421 | 293 | 5066 | 202 | 1860 |
| 2029 | 7543 | 302 | 5215 | 37 | 1990 |
| 2030 | 7671 | 308 | 5319 | 91 | 1952 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 251.72 | 36.8% |
| 10-Year DCF (Growth) | 248.86 | 35.2% |
| 5-Year DCF (EBITDA) | 90.01 | -51.1% |
| 10-Year DCF (EBITDA) | 121.63 | -33.9% |
Is BT Group PLC (BT.A.L) a buy or a sell? BT Group PLC is definitely a buy. Based on our DCF analysis, BT Group PLC (BT.A.L) appears to be significantly undervalued with upside potential of 35.2%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $184.05.