Here is why our AI model thinks BT Share price is about to tank

With the sky deal falling through Mersinoglu, Y. C. and Banning-Lover, R. (2024), please don’t get fooled by the noise in the street saying it’s undervalued, it is more like overvalued garbage!. We expect 50% of sky subscribers to cancelling their BT connection and replace them with Cityfiber which is a great loss for the company and even a very foolish one by the BT management that couldn’t keep the ego aside and offer a better deal than the cityfiber, because you don’t really want to lose 50% of your customers, but now its too late for the party.

Even though they had mentioned they are expected to lose ” 196,000 in the three months citing competitor losses’ Mersinoglu, Y. C. and Banning-Lover, R. (2024) Which is bull***! This is why we informed all our investors that they better get out of the stock, it shows the management doesn’t care about the investors in the stock and we should not care about BT just because they have a large fancy office. The funniest thing about this transaction is, they didn’t lose to Vodafone, EE or Virgin. They lost to cityfiber which is a tiny company compared to BT. This really feels like someone at BT had an underhand deal with the cityfiber to allow them to win over the contract.

Here is the prediction that our AI model BroInsight think of the BT Group plc

It predicts the BT share price will fall downward by £1 by June of 2026 which is in about 6 months, we believe there is a chance to short the stock from £1.60 to £1 which is a gain of 37.5% not bad for an investment hold for 6 months. When short selling you need to buy puts in BT. Make sure you understand the risk of short-selling before you do! If you ask how well our prediction model is? It has a prediction mean error of (RMSE) 12.84. This means there is a change of two case scenarios happening, either stock could fall further down to 87.52 by June or 112.48 by June all these cases are in your favour to bet.

Human Analyst View

A freelance investment writer Dr. James Fox stated the stock is undervalued and stated he is considering buying BT shares for £1.57. This is what’s wrong with this argument, BT holds an ever-growing debt of £20.3Bn as of November 2024. They believe the full-fibre broadband network is going to fix their internal spending habits. In our opinion, we believe BT has to start thinking of a public company that is not governed by the British government. Because the government can print money but they can’t unless they issue bonds that are worthless.

Based on the BT group plc year ended 31 March 2024 page 145

Total Revenue: £20,797 Million

Finance Expenses: £1,188 Million

Profit for the Year: £855 Million

Based on the same report the year ended 31 March 2023

Total Revenue: £20,681 Million

Finance Expenses: £894 Million

Profit for the year: £1,905 Million

If you analyse this with your own eyes, you can clearly see the drop in profit by 55.11%, which is not good if you ask me! The total operational cost of BT Group plc is at £18,583 in 2024 which is up by £500 million pounds. The operational cost as a percentage of the revenue is close to 90% of the revenue goes to operational costs and then to finance expenses. If they can bring this down to 80% yes we will recommend “BUY” which is automatically calculated by our BroInsight AI model Till then it’s a Short (SELL) from Bro in Finance.

Reference:

Mersinoglu, Y. C. and Banning-Lover, R. (2024) BT suffers blow as Sky opts for CityFibre’s network in broadband deal, Subscribe to read. Financial Times. Available at: https://www.ft.com/content/80f85190-f28b-4479-b94e-5523206d9573 (Accessed: 7 December 2024).