BT share price stalls at 23.6% Fib ahead of earnings

BT (LON: BT.A) share price has drifted lower this week ahead of the upcoming financial results scheduled for Thursday this week. The stock was trading at 127.90p on Monday, a few points below the year-to-date high of 132.70p. It is sitting at about 34% below the highest point in July last year.

BT Group earnings ahead

BT Group has had a strong start of the year. The shares have risen by over 15.8% from the lowest level in December last year. Focus now shifts to the upcoming earnings results by the bruised telecommunication company continues. The results will come out on Thursday this week.

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Analysts expect that the company’s business remained under pressure in the last quarter of the year. The consensus is that the company’s revenue dropped by 2.5% year-on-year in Q4 to over £5.2 billion. Revenue of its consumer business is expected to come in at £2.59 billion while its OpenReach is expected to be £1.49 billion.

For the full year, analysts are that the company’s revenue also dropped by 2.5% to £20.8 billion. Meanwhile, its full-year EBITDA is expected to come in at £7.57 billion and £2 billion for the quarter. 

The statements will come a week after Goldman Sachs boosted its estimate for the stock. In a note, the estimate said that BT’s digital infrastructure fibre monetization was running ahead of expectations. Citi analysts are also bullish on BT as Vodafone is facing a mountain of challenges.

BT is facing numerous challenges going forward but the strong dividend yield could attract some investors. The company has a dividend yield of 5.96%, which is lower than Vodafone’s 8%. However, BT is a safer firm considering that it is mostly focused on the UK. Its free cash flow can also support the payouts.

BT share price forecast

BT stock price has moved sideways starting from January 9th of this year. In this period, it has been stuck at around 128p level. This price is a few points below the 23.6% Fibonacci Retracement level. It is also consolidating at the 25-day and 50-day moving averages and is struggling to move above the important point at 131.60p (January 17 high and 23.6% Fib).

Therefore, the stock will likely remain in this range ahead of the company’s earnings. It will then have a bullish breakout after the results. If this happens, the next key level to watch will be at 143.90p, the 38.2% retracement point.