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Up 37% in a year, the BT share price could have another 56% to go
Up 37% in a year, the BT share price could have another 56% to go

Yahoo

time7 hours ago

  • Business
  • Yahoo

Up 37% in a year, the BT share price could have another 56% to go

The latest BT Group (LSE: BT.A) share price surge started in May 2024, when the telecoms giant announced the turnaround point in its fibre broadband rollout. Capital expenditure should start to fall, revenue and profits should rise, and shareholders should break into happy smiles as they work out what to do with their rising dividend cash. Well, that's the idea. And the share price has responded well. Since then we're looking at an increase of more than 80%, with a 37% gain in the past 12 months. The improving outlook has made most broker forecasts more optimistic than they've been for years. They predict a 60% rise in earnings per share between 2024 and 2027. The prospective dividend yield stands at around 4.2% now. It was suspended and then rebased to half its previous levels in the Covid years. And after that, I'd say it's looking sustainable again. And if that doesn't make BT shares look attractive enough, broker price targets might make the difference. The top of the target range stands at 299p. That's a whopping 56% ahead of the price at the time of writing (27 June). Admittedly that's the most optimistic prediction I could find. But only this week, Berenberg raised its price target to 240p. The private bank — founded in 1590, so there's long term for you — sees 'defensive growth.' It also suggests there could be a sharp dividend rise in 2027, as the end of broadband rollout expense should improve cash flow. That 240p is 25% ahead of BT's share price today. Morgan Stanley has also recently raised its price target for BT stock. Previously set at 225p, the global financial services firm has raised its sights to the same 240p. But the real caution comes from the range of price predictions. Those two are in the bullish end of the range, but the average is only a few pennies above today. And there's a low-end level of just 118p, for a 39% fall. To get a feel for who might be right, we need to turn to BT's stock valuation. And that's where debt makes things tricky. Net debt reached £19.8bn in the 2025 fiscal year, a bit more than the company's market cap. Anyone who buys today is effectively putting only around half their money into BT's actual business We're looking at a forecast price-to-earnings (P/E) ratio of about 11 based on 2028 forecasts. And if it wasn't for the debt, I might see that as screaming cheap. But adjusting for the debt, we see an effective P/E valuation for the business itself of about twice that. Perhaps not such an obvious bargain. It is, however, possibly closer to a fair valuation than I think I've seen for a long time. Because of the debt and uncertainty surrounding valuation, I won't buy BT shares. But those who favour these broker target upgrades could do well to consider BT for long-term income. The post Up 37% in a year, the BT share price could have another 56% to go appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

8.4% yield! I'm eyeing this share for my SIPP in July
8.4% yield! I'm eyeing this share for my SIPP in July

Yahoo

time7 hours ago

  • Business
  • Yahoo

8.4% yield! I'm eyeing this share for my SIPP in July

It is just a few days until the first half of the year ends and July begins. That seems like an opportune moment to review a Self-Invested Personal Pension (SIPP) and consider any potential sales or purchases. My own SIPP is lighter on income shares that it was a few months ago. While some growth opportunities continue to attract me, I would also be happy to pick up some income shares in July if I have spare funds to invest. One that has caught my eye is Legal & General (LSE: LGEN). A track record in the stock market, as elsewhere in life, does not necessarily give us a reliable indicator of what may happen next. But it can still contain valuable data. Take Legal & General's track record as an example. It has proven its business model over the long run, with a consistent ability to generate profits in recent years. It has also proven willing to use cash flows to help fund dividend growth. The last cut in the dividend per share followed the financial crisis. Only in one year since then – during the pandemic – has the firm failed to raise the payout per share. While that was 5% in recent years, growth is pencilled in for 2% annually in coming years. That is modest, but it is still growth. So it is attractive to me, given that the share already offers an 8.4% dividend yield. What about the opportunity for share price gain? Here I am less optimistic. Legal & General has seen its share price grow over the past five years. But at 17%, that growth has badly underperformed the wider FTSE 100 index's gain of 42% during that period. I also see some reasons that the share price could fall. The changed dividend policy is one, not just because of the lower growth trajectory but also because it could be seen as a sign of weakness. That said, the company has promised to return cash through share buybacks too, but many investors including myself see dividends as a more tangible form of shareholder return than buybacks. Profits have been notably weaker in the past three years than they were before. Last year, for example, net profit of £191m was less than a 10th of what it had been in 2021. With a highly competitive market for the sort of retirement-linked financial products in which it specialises and volatile stock markets risking weaker stock market returns, I see threats to future earnings too. Another such threat to earnings is the company's planned sale of a large US business. The upside of that however, is that it should generate a sizeable cash sum. That could help support the planned dividend growth. On that basis, I do not see the current Legal & General share price as a screaming bargain. But in my SIPP I am happy to buy, for the long term, shares in great companies at attractive prices. I do think this high-yield FTSE 100 share is fairly priced and I like its long-term business prospects, thanks to its strong brand and large customer base. So I will be happy to buy it next month if there is spare money in my SIPP. The post 8.4% yield! I'm eyeing this share for my SIPP in July appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool C Ruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Air Astana: How can Kazakhstan's flag carrier boost its dwindling share price?
Air Astana: How can Kazakhstan's flag carrier boost its dwindling share price?

Yahoo

time8 hours ago

  • Business
  • Yahoo

Air Astana: How can Kazakhstan's flag carrier boost its dwindling share price?

As Central Asia's only airline listed on three stock exchanges, Kazakhstan's flagship carrier Air Astana has led the region's aviation sector for over 20 years. Since its IPO in February 2024, the airline's share price has dipped. Ahead of their half year results, Euronews sat down with Air Astana's CEO, Peter Foster, to discuss his plans to raise share prices and expand Kazakhstan's flag carrier's global presence. Q: How do you assess investor sentiment following Air Astana's IPO, and what key strategies do you plan to implement to maintain stock and shareholder value? A: The stock price has been a bit disappointing since the IPO in February of last year — the stock price has declined. The main point to make is that the company, in fact, has performed extremely well and continues to do so. So of course, our job is to manage the company to the best of our ability and of course to maximise shareholder value. We have recently announced a very substantial dividend. In fact, the largest dividend that we've ever paid, and one of the largest dividends in the airline industry today. And that's a reflection of the strong performance, of the strong balance sheet, the strong cash balance. We believe that if we continue to manage the company well and if it performs well, the stock price will follow eventually. The key really is to continue managing the airline in the way that we have in all [my] 20 years here: To keep focussed on cost, to keep cost competitive so that the airline remains competitive in an increasingly challenging global marketplace and to maximise service levels to ensure top class safety standards and by doing so, we can leverage the quality of the product to ensure the airline continues being profitable. Related The Big Question: How will AI transform the travel industry? Airbus pledges higher dividends as it confirms financial guidance Q: You have outlined major strategic opportunities for international growth — in the Gulf, Western Europe, China, Korea, Japan and India. What would these partnerships entail? A: Kazakhstan is a country of 20 million people and yet Air Astana today is at 62 aircraft and of course we intend to grow that to 84 aircraft by the end of 2028. When you look at the size of Air Astana and growth profile and the overall size of the Kazakhstan market, you see that of course we are proud to serve the Kazakhstan market and Kazakhstan's travellers, but it's not sufficient to enable the airline to grow as we are doing into a significant international airline player. Therefore, we absolutely need to leverage our position in close proximity to some of the world's largest markets to ensure that we are also getting a significant portion of our customers from those large markets which are much bigger than Kazakhstan. The best way to leverage that geographical position is to work with partner airlines from those countries. We're presently in discussions with China Southern in China, we are having discussions with carriers in India, we've recently signed a code share with Japan Airlines for the Japanese market, we have an existing commercial relationship with Lufthansa for western Europe, with Turkish Airlines for Turkey. So, this is the way that an airline of our aspiration with a home market that is relatively small can leverage the quality of the airline and the geography of location of the airline with partners to expand beyond its own borders. Q: With the current shortage of fuel-efficient aircraft, how is Air Astana adapting its operational strategies? A: The manufacturers and the engine manufacturers introduced new engine technology from NASA ten years ago. Without going into technical detail, it was technology that was primarily driven by the need to provide higher bypass engines, which are more fuel-efficient. You get more power from less fuel burned, which saves the airline money and of course, it's more environmentally sustainable. In fact, on an average flight, it takes to London [from Astana], a 7.5-hour flight, we can save up to 20-25% more fuel than would have been burning in the past times. So that's very good. The problem with that is that the engine technology is relatively new, complex and it has been subject to reliability issues which are ongoing and so we're not getting quite the efficiency or the sustainability readings that we had hoped for. But those problems will resolve themselves in time and therefore we can expect to get the full benefits both in terms of economics and the environment as we go forward. Related 'Geologically blessed': How Kazakhstan can help Europe's green transition Volvo Cars CEO: dual tech for China and the West is new trade reality Q: What green technologies or sustainability initiatives is Air Astana adopting to contribute to Kazakhstan's net-zero goals? A: We were one of the first movers to bring in the Airbus neo long-range aircraft. In fact, we were the first airline to sign for those aircraft at Paris Air Show ten years ago. They are significantly better, more optimal than the previous engine technology that was deployed on aircraft on those long routes and we will continue to introduce those aircraft in order to meet the sustainability targets. The manufacturers are working on enhanced technology in terms of aerodynamics, in terms of wing design, in terms of engine design, as we go forward. But inevitably the significant portion of our realisation of net zero will come from carbon credits and the CORSIA scheme (Carbon Offsetting and Reduction Scheme for International Aviation), which has been introduced and endorsed by the United Nations and all member states. Sign in to access your portfolio

What Makes Union Pacific's Railroad Network Hard to Replace
What Makes Union Pacific's Railroad Network Hard to Replace

Yahoo

time8 hours ago

  • Business
  • Yahoo

What Makes Union Pacific's Railroad Network Hard to Replace

Union Pacific Corporation (NYSE:UNP) is one of the Best Wide Moat Dividend Stocks to Invest in. An intermodal container train winding through a rural landscape. Union Pacific Corporation (NYSE:UNP) is one of the largest railroads in North America, operating mainly in the western two-thirds of the US. It also connects with Canadian rail networks and serves all six major gateways to Mexico. While it might seem vulnerable to trade tensions, the company has solid earnings and guidance, even as many others lowered theirs. Union Pacific Corporation (NYSE:UNP) divides its freight revenue into three main segments: bulk, industrial, and premium, each contributing about a third of total freight income. Its diverse product mix and low operating costs help it stay resilient even during periods of higher tariffs. The company continues to demonstrate strong efficiency and return on invested capital. A high operating margin reflects its ability to generate strong profits after covering operating expenses. Union Pacific Corporation (NYSE:UNP) intends to invest $3.4 billion in 2025 to enhance safety, upgrade infrastructure, and support customer growth. This breaks down to over $9 million per day spent on improving rail operations and driving economic and supply chain activity across the 23 states it serves, benefiting local, regional, and national economies. The company's vast and intricate rail network is tough to replicate because of its size, the complexity of its connections, the specialized equipment it uses, and the major time and cost involved in building and maintaining such infrastructure. Union Pacific Corporation (NYSE:UNP) has been paying uninterrupted dividends to shareholders for the past 125 years, while growing its payouts for 18 consecutive years. The company offers a quarterly dividend of $1.34 per share and has a dividend yield of 2.35%, as of June 24. While we acknowledge the potential of UNP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and . Disclosure. None. Sign in to access your portfolio

Air Astana: How can Kazakhstan's flag carrier boost its dwindling share price?
Air Astana: How can Kazakhstan's flag carrier boost its dwindling share price?

Yahoo

time8 hours ago

  • Business
  • Yahoo

Air Astana: How can Kazakhstan's flag carrier boost its dwindling share price?

As Central Asia's only airline listed on three stock exchanges, Kazakhstan's flagship carrier Air Astana has led the region's aviation sector for over 20 years. Since its IPO in February 2024, the airline's share price has dipped. Ahead of their half year results, Euronews sat down with Air Astana's CEO, Peter Foster, to discuss his plans to raise share prices and expand Kazakhstan's flag carrier's global presence. Q: How do you assess investor sentiment following Air Astana's IPO, and what key strategies do you plan to implement to maintain stock and shareholder value? A: The stock price has been a bit disappointing since the IPO in February of last year — the stock price has declined. The main point to make is that the company, in fact, has performed extremely well and continues to do so. So of course, our job is to manage the company to the best of our ability and of course to maximise shareholder value. We have recently announced a very substantial dividend. In fact, the largest dividend that we've ever paid, and one of the largest dividends in the airline industry today. And that's a reflection of the strong performance, of the strong balance sheet, the strong cash balance. We believe that if we continue to manage the company well and if it performs well, the stock price will follow eventually. The key really is to continue managing the airline in the way that we have in all [my] 20 years here: To keep focussed on cost, to keep cost competitive so that the airline remains competitive in an increasingly challenging global marketplace and to maximise service levels to ensure top class safety standards and by doing so, we can leverage the quality of the product to ensure the airline continues being profitable. Related The Big Question: How will AI transform the travel industry? Airbus pledges higher dividends as it confirms financial guidance Q: You have outlined major strategic opportunities for international growth — in the Gulf, Western Europe, China, Korea, Japan and India. What would these partnerships entail? A: Kazakhstan is a country of 20 million people and yet Air Astana today is at 62 aircraft and of course we intend to grow that to 84 aircraft by the end of 2028. When you look at the size of Air Astana and growth profile and the overall size of the Kazakhstan market, you see that of course we are proud to serve the Kazakhstan market and Kazakhstan's travellers, but it's not sufficient to enable the airline to grow as we are doing into a significant international airline player. Therefore, we absolutely need to leverage our position in close proximity to some of the world's largest markets to ensure that we are also getting a significant portion of our customers from those large markets which are much bigger than Kazakhstan. The best way to leverage that geographical position is to work with partner airlines from those countries. We're presently in discussions with China Southern in China, we are having discussions with carriers in India, we've recently signed a code share with Japan Airlines for the Japanese market, we have an existing commercial relationship with Lufthansa for western Europe, with Turkish Airlines for Turkey. So, this is the way that an airline of our aspiration with a home market that is relatively small can leverage the quality of the airline and the geography of location of the airline with partners to expand beyond its own borders. Q: With the current shortage of fuel-efficient aircraft, how is Air Astana adapting its operational strategies? A: The manufacturers and the engine manufacturers introduced new engine technology from NASA ten years ago. Without going into technical detail, it was technology that was primarily driven by the need to provide higher bypass engines, which are more fuel-efficient. You get more power from less fuel burned, which saves the airline money and of course, it's more environmentally sustainable. In fact, on an average flight, it takes to London [from Astana], a 7.5-hour flight, we can save up to 20-25% more fuel than would have been burning in the past times. So that's very good. The problem with that is that the engine technology is relatively new, complex and it has been subject to reliability issues which are ongoing and so we're not getting quite the efficiency or the sustainability readings that we had hoped for. But those problems will resolve themselves in time and therefore we can expect to get the full benefits both in terms of economics and the environment as we go forward. Related 'Geologically blessed': How Kazakhstan can help Europe's green transition Volvo Cars CEO: dual tech for China and the West is new trade reality Q: What green technologies or sustainability initiatives is Air Astana adopting to contribute to Kazakhstan's net-zero goals? A: We were one of the first movers to bring in the Airbus neo long-range aircraft. In fact, we were the first airline to sign for those aircraft at Paris Air Show ten years ago. They are significantly better, more optimal than the previous engine technology that was deployed on aircraft on those long routes and we will continue to introduce those aircraft in order to meet the sustainability targets. The manufacturers are working on enhanced technology in terms of aerodynamics, in terms of wing design, in terms of engine design, as we go forward. But inevitably the significant portion of our realisation of net zero will come from carbon credits and the CORSIA scheme (Carbon Offsetting and Reduction Scheme for International Aviation), which has been introduced and endorsed by the United Nations and all member states. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

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