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CS First Boston Upgrades BT Group to 'Neutral'


Credit Suisse First Boston upgraded BT Group (BTY) to neutral from underperform.

Analyst Justinian Clifford-Bowles says following a period of sustained underperformance of both the sector and the British stock market, she believes BT shares are now approaching fair value levels on existing estimated fiscal 2004 (March) forecasts for its dividend yield (4.7%), price/earnings (10 times earnings), and free-cash flow (10%).

She notes as BT nears financial rehabilitation, investors face the possibility of increased distribution. Clifford-Bowles also thinks the increasing payout ratio from 50% to 80% for fiscal 2005 is a realistic option, offering a potential 8.7% yield by fiscal 2005.


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