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In 2025, the BT (LSE:BT.A) share price jumped by 28%, outperforming the FTSE 100 in the process. Yet at the start of 2026, I don’t think that the party’s over.
When I consider the long-term view alongside the current valuation, I believe it’s plausible the share price will keep rising. Here’s why.
Reasons to be positive
If we rewind a decade, the stock was trading at just under 500p. Now it’s at 183p. Of course, a lot has changed in 10 years but to me it shows that now could be a once-in-a-decade opportunity to buy the stock still. There’s potential for it to return to those prices in the years to come.
A good way to compute this is by considering the price-to-earnings ratio. Currently, this sits at 9.77. The FTSE 100 average ratio is 18.1. So if the BT share price doubled, even with the same current earnings per share, it would only be marginally above the index average ratio. Put another way, the stock could double, and the valuation would still be below some other companies in the FTSE 100.
There’s a valid reason for thinking that the earnings per share won’t stay the same, but increase further. This could be another benefit for the stock. After all, BT’s nearing the end of its fibre and 5G build-out. Capital expenditure is expected to fall materially over the next few years.
That should translate into stronger free cash flow, which will make investors happy, as it can be used to fund new projects.
Why I could be wrong
Part of the reason the stock‘s declined from levels a decade ago is the tens of billions spent on the Openreach buildout. Investors effectively funded infrastructure with delayed returns, hurting sentiment.
But it’s true that in that period, competition’s risen significantly, with the broadband and mobile markets becoming more crowded. With the recent Vodafone and Three deal, this could rise even more.
This is the main risk, in my view, that the stock could keep outperforming. After all, this increased pricing pressure could reduce growth expectations.
Risk and reward
There’s nothing to guarantee the share price will hit 500p over the next few years, but even without that target, it still looks like a relatively low-risk stock with generous upside potential.
Let’s also not forget about the dividend. The current dividend yield is 4.47%, comfortably above the FTSE 100 average. I’d expect the dividend per share to increase going forward, now that the capital expenditure peak is behind us.
When I put it all together, I do think the current share price represents a once-in-a-decade opportunity to buy at a low valuation, with the vision of getting back to the decade highs in the coming years. Therefore, I feel it’s a stock for investors to consider.
