Key Morningstar Metrics for BT Group

• Fair Value Estimate: GBX 200
• Morningstar Rating: ★★★
• Morningstar Economic Moat Rating: None
• Morningstar Uncertainty Rating: Medium

What We Thought of BT Group’s Earnings

BT reported second-quarter revenue of GBP 4.9 billion, down 3% year over year and broadly in line with consensus. Cost-control measures continued to provide margin relief amid top-line pressure, resulting in adjusted EBITDA of GBP 4.9 billion, 1% ahead of expectations and in line with last year.

Why it matters: We continue to appreciate BT’s execution in a challenging market environment.

• BT achieved an additional GBP 247 million of annualized cost savings in the first half of its fiscal 2026, bringing the company to a cumulative GBP 1.2 billion in the first 18 months of its new plan, well on track to deliver on its GBP 3 billion target by fiscal 2029. Cost control showed up in EBITDA, as a 3% revenue year-to-date decline translated into flat EBITDA.
• The Openreach fiber-to-the-premises penetration rate has grown 160 basis points since March, reaching 37.7% this quarter. Gains in superfast broadband networks were offset by losses in lower-speed lines, with 242,000 total broadband losses accelerating from last quarter’s 169,000. Still, EBITDA grew 4% year over year as a higher FTTP mix is beneficial for Openreach, based on the structure of its long-term Equinox plan for customers seeking wholesale access.

The bottom line: We maintain our GBX 200 fair value estimate and no-moat rating for BT Group BT.A. Despite the 15% share price decline over the past three months, we still do not see a sufficient margin of safety for investors to enter the stock, which currently trades in 3-star territory. We are pleased with BT’s execution in a broadband market that remains especially tough. Management maintained its full-year outlook for revenue of about GBP 20 billion and EBITDA of GBP 8.2 billion–GBP 8.3 billion, consistent with our expectations.