The most recent BT Group (LSE: BT.A) share price surge began in Could 2024, when the telecoms big introduced the turnaround level in its fibre broadband rollout.

Capital expenditure ought to begin to fall, income and income ought to rise, and shareholders ought to break into glad smiles as they work out what to do with their rising dividend money.

Nicely, that’s the concept. And the share price has responded properly. Since then we’re taking a look at a rise of greater than 80%, with a 37% acquire previously 12 months.

Extra to return?

The enhancing outlook has made most dealer forecasts extra optimistic than they’ve been for years. They predict a 60% rise in earnings per share between 2024 and 2027.

The possible dividend yield stands at round 4.2% now. It was suspended after which rebased to half its earlier ranges within the Covid years. And after that, I’d say it’s wanting sustainable once more.

And if that doesn’t make BT shares look enticing sufficient, dealer price targets may make the distinction. The highest of the goal vary stands at 299p. That’s a whopping 56% forward of the price on the time of writing (27 June).

Let’s be cautious

Admittedly that’s essentially the most optimistic prediction I might discover. However solely this week, Berenberg raised its price goal to 240p. The personal financial institution — based in 1590, so there’s long run for you — sees “defensive growth.” It additionally suggests there may very well be a pointy dividend rise in 2027, as the tip of broadband rollout expense ought to enhance money circulate.

That 240p is 25% forward of BT’s share price at present.

Morgan Stanley has additionally lately raised its price goal for BT inventory. Beforehand set at 225p, the worldwide monetary providers agency has raised its sights to the identical 240p.

However the actual warning comes from the vary of price predictions. These two are within the bullish finish of the vary, however the common is only some pennies above at present. And there’s a low-end degree of simply 118p, for a 39% fall.

What do valuations say?

To get a really feel for who is likely to be proper, we have to flip to BT’s inventory valuation. And that’s the place debt makes issues tough. Internet debt reached £19.8bn within the 2025 fiscal 12 months, a bit greater than the corporate’s market cap. Anybody who buys at present is successfully placing solely round half their cash into BT’s precise enterprise

We’re taking a look at a forecast price-to-earnings (P/E) ratio of about 11 based mostly on 2028 forecasts. And if it wasn’t for the debt, I would see that as screaming low-cost.

However adjusting for the debt, we see an efficient P/E valuation for the enterprise itself of about twice that. Maybe not such an apparent cut price. It’s, nonetheless, presumably nearer to a good valuation than I feel I’ve seen for a very long time.

Intention for the targets?

Due to the debt and uncertainty surrounding valuation, I received’t purchase BT shares. However those that favour these dealer goal upgrades might do properly to think about BT for long-term revenue.