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The BT (LSE: BT.A) share price has come a long way from the days when it felt permanently stuck in the slow lane. For years it was ignored, unloved, and written off, before suddenly springing back to life.
BT really found its momentum through 2024 and 2025. Last year alone, the shares climbed 23%, while over two years they’re up around 50% with some chunky dividends along the way. Has this once-moribund telecoms giant finally turned the corner?
Why this FTSE 100 stock struggled
BT’s long-running problems included a ballooning debt pile, huge legacy pension scheme, costly adventures into sports broadcasting and the eye-watering expense of rolling out the Openreach fibre network. Add fierce competition and years of strategic drift, and it’s easy to see why the shares were so sickly.
So what’s different now? Chief executive Alison Kirkby has arrived with a clear brief to cut costs, simplify the business, and focus on what BT does best. The heaviest investment phase in Openreach is now largely complete, meaning cash can start flowing back rather than being poured into the ground.
Finally, BT believes that automation and AI will dramatically shrink the workforce and turn BT into a steadier, cash-generative operation, rather than a never-ending turnaround story. Although as with everything surrounding AI, we just don’t know yet.
I’m impressed by its progress, but a little uneasy. From an investment point of view, the easiest money was arguably made two or three years ago, when the shares were truly bombed out. Back then, the price-to-earnings ratio was around six or seven and the dividend yield topped 6%. The risks were potentially higher, but so were the rewards.
Valuation meets reality
BT no longer looks outrageously cheap. The forward price-to-earnings ratio for 2026 sits around 13.3. The forecast dividend yield is now 4.5%. And it still has around £20bn of debt on the balance sheet. That’s bigger than it’s £17.7bn market cap.
Operationally, the picture remains mixed. In November, BT revealed it had shed 242,000 broadband customers during the second quarter as competition intensified and the market softened. That was disappointing. On the plus side, demand for Openreach full fibre hit a record, with 1.1m net additions over the half year, taking total connected premises to 7.6m. Group revenues slipped 3% to £9.8bn, dragged down by declining legacy voice services, lower mobile handset sales, and weaker international operations.
BT is cleaner, simpler, and more focused than it’s been for years, but still operates in a tough and crowded market. So what do the experts say?
Broker forecasts suggest the shares could rise around 9.5% to just under £2 over the next 12 months. Add the dividend and the total return could approach 14%. That would turn £10,000 into roughly £11,400.
That’s perfectly respectable, but not spectacular. Over the longer run, I think BT should continue to grind higher as a solid income growth stock. Investors might consider buying, but for real excitement and bigger yields, I can see more exciting opportunities elsewhere on the FTSE 100. And bigger yields too.
