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BT (LSE: BT.A) shares have smashed the FTSE 100 over the past 12 months, climbing a staggering 60%. It hurts me to write that, because I flagged the telecoms giant several times last year as a recovery play to consider.
Unfortunately, I failed to add it to my own Self-Invested Personal Pension (SIPP). That oversight’s been a costly one.
At the time, BT shares looked cheap as chips, trading at around six times earnings while offering a dividend yield north of 6%.
Can this value stock continue to win?
BT has continued to do well in 2025. An investment of £10,000 when markets opened in January would now be seeing a 15.5% gain today, with that stake now worth £11,550. That’s an extra £1,550 in just under four months. So can it continue to flourish?
Encouragingly, the BT share price stil doesn’t look overly expensive, trading at around nine times earnings. So there’s potential value here.
The yield has slipped to 4.75%, but that’s purely because the share price has raced ahead. Analysts reckon it could edge back up to 4.86% this year and 4.95% in 2026, as the board hikes dividends. That’s still respectable.
The consensus one-year share price target from 15 brokers is 192.2p. That’s a 13% premium to today’s 169.4p. Combined with dividends, that suggests a potential total 12-month return approaching 18%. That’s clearly a more pedestrian pace than last year’s fireworks, but not too shabby. Obviously, forecasts cannot be relied upon, but this one reflects how I view the outlook.
There are still reasons to tread carefully. BT carries a hefty £20bn net debt, and with interest rates still high servicing that is costly. Plus it also has that burdensome pension scheme.
Competition also remains fierce as BT faces rivals such as Virgin Media O2, Vodafone and Sky across broadband, mobile and TV.
Meanwhile, its Openreach full-fibre broadband roll-out has made great gains. In Q3, BT added a net 472,000 fibre customers and now boasts a 35% take-up rate. However, keeping customers loyal is a constant battle, as total broadband lines fell by 208,000 over the quarter.
Dividends, growth and hope
That said, BT’s made impressive strides under new boss Allison Kirkby. Many were sceptical as she became the latest CEO to announce a group overhaul, but she’s quietly defied expectations.
Her push to focus BT on the UK looks increasingly prescient as companies worldwide reassess the risks of sprawling global operations, amid trade concerns.
Progress is clearly visible. Consumer service revenue returned to growth in Q3. Cost savings helped push adjusted EBITDA up 4% to £2.1bn.
Kirkby’s steadied a leaky and directionless ship, and BT shares could still have further to go. However, debt and pension challenges remain and it feels to me as if the big gains have now been made. Although I said that at the start of 2025, and the shares have defied global stock market volatility to climb steadily.
But I won’t buy BT shares. It feels like I missed my chance a year ago. Instead, I’ll hunt for the next big FTSE 100 recovery play, rather than the last one. And this time I’ll put my money where my mouth is.
