Picture supply: BT Group plc
UK-listed telecoms shares have delivered large returns in 2025. It appears this sector has benefitted from a rotation into European worth shares. Can these shares proceed to carry out over the subsequent 12 months? Let’s check out analysts’ share value forecasts for BT (LSE: BT.A), Vodafone (LSE: VOD), and Airtel Africa (LSE: AAF) to see what they’re predicting.
BT
Beginning with BT, the typical analyst value goal right here is 200p. That’s truly 4% beneath the present share value.
In different phrases, the consensus view is that there’s little scope for good points from right here. Analysts do forecast a 4% dividend yield over the subsequent 12 months although.
Personally, I agree that there’s not a lot potential for capital good points with BT. For a begin, it’s had an enormous run, climbing about 40% this 12 months.
Secondly, the present price-to-earnings (P/E) ratio of 11.5 seems to be about proper to me. On condition that BT’s producing minimal development and has an enormous debt pile (a giant danger), I can’t see the inventory commanding a considerably greater valuation.
Now, it’s price declaring BT is speaking about utilizing AI to extend effectivity. This might create extra potential.
For now although, I see it as totally valued. Due to this fact, I don’t view it as a Purchase to think about right this moment.
Airtel Africa
Zooming in on Airtel Africa, it makes BT seem like a slouch. It’s up about 75% for the 12 months.
It appears analysts imagine the inventory has bought a bit forward of itself, nonetheless. At the moment, the consensus value goal is 186p – 11% beneath right this moment’s share value of 208p.
Whereas a pullback here’s a chance, I just like the look of this telecoms inventory. That’s as a result of it operates in development markets and is producing engaging income and earnings development at current.
This monetary 12 months (ending 31 March 2026), income is anticipated to come back in at $5.8bn, up 18% 12 months on 12 months. There should not many telecoms companies producing that form of top-line development.
Wanting on the P/E ratio, the inventory does look a bit of dear on a a number of of 19. However with earnings forecast to develop quickly within the years forward, it ought to have the ability to develop into its valuation (the P/E ratio utilizing subsequent 12 months’s earnings forecast is barely 13).
In fact, African economies may be considerably extra risky than developed markets so it is a danger. Taking a long-term view, nonetheless, I believe the inventory is price contemplating.
Vodafone
Lastly, turning to Vodafone, the typical value goal right here is 87p. That’s about 5% above the present share value.
Now, I’ve been fairly bearish on Vodafone lately. However trying on the inventory right this moment, I’m rather less bearish than I used to be.
One factor that jumps out at me right here is that subsequent monetary 12 months (beginning in April), analysts count on Vodafone’s earnings per share to leap 17% to €9.70. That’s a major stage of development and it might generate some curiosity within the inventory.
One other factor price mentioning is that the inventory has lagged different telecoms shares lately (it’s solely up about 20% this 12 months). So, it might have some catching as much as do.
That stated, the valuation does look fairly full right this moment (the P/E ratio is 11.4.). And a big debt pile provides danger.
So, whereas the inventory may very well be price contemplating, I believe there are higher UK shares on the market.
