Anywhere under £4.17, BT’s share price looks a steal to me
Image source: BT Group plc
On several key measurements of relative stock value, BT’s (LSE: BT.A) share price looks extremely undervalued, I believe. The same applies to its valuation based on forecast future cash flows.
More specifically to begin with, it trades at a price-to-earnings ratio (P/E) of just 16.5. This compares to the average P/E of its competitor group of 19.8. Orange is at 13.1, Vodafone at 19.1, Telenor at 20, and Deutsche Telekom at 26.9.
On the price-to-book ratio (P/B), BT presently trades at 1.1 against its competitor group average of 1.6. And on the price-to-sales ratio (P/S) it is currently at 0.7 versus a 1.2 average for its peers.
So, on each of the key measures BT is cheap.
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