If Bt has bought back 2million 5 thousand shares to day. How come it shows on trades as a sell?

Citigroup Buy 301.65 460.00 425.00 Retains

Barclays Capital Overweight 301.65 525.00 525.00 Reiterates

Beaufort Securities Buy 305.80 440.00 360.00 Retains

RBC note today:
"We see BT's shock announcement as an opportunity to buy. BT Italia will be resolved, the public sector could be partly timing due to government changes, and the rest of the business is in good shape. BT is strategically very well positioned, is deleveraging (despite growing dividends) and can resolve the regulatory overhang.

(1) BT Italia will ultimately be resolved. KPMG has almost finished its review and the issues do not affect other Global Services units. The £175m hit on EBITDA of c.£65m is unlikely to leave BT with a £100m loss each year as FY17 and FY18 include cost write-backs and BT will seek to turn the unit around.
2) Public sector could be partly timing. Management said the issues were probably due to the economy and Brexit, with departments not spending their budgets before their year ends, less decentralisation of budgets, and smaller renewals of big contracts. The comments appear to echo what other public-sector-facing business have said, eg, Carillion: "the pace of new order intake has slowed... due in part to the changes within UK Government Departments following the EU referendum result". We agree with our colleagues in business services that these changes in government and the uncertainty of Brexit appear to be delayed decision making rather than a permanent reduction in order flow.
3) Rest of the business appears OK. BT reports 3Q on Friday, but the rest of the business appears in decent health with strong mobile demand in corporate and SME (virgin territory to retail-focused EE), whole and ventures seeing an improving underlying trend and Openreach recording the highest-ever fibre broadband adds.

We use a discounted cash flow (DCF) and multiple-based SOTP to arrive at our ex-dividend price target of 475p. Our weighted cost of capital is 7.5% for BT with modest perpetual growth assumptions (1.0%). Our price target supports our Outperform rating.

Louis Capital still negative:
"**** PT CUT TO 250P - SELL INTO ANY DEAD CAT BOUNCE THIS WEEK - I am cutting my PT on BT from 300p to 250p this morning. The main reason is that the stock movement yesterday was mainly driven by weakening fundamentals on the "top line" only. The impact of a worsening "cost" situation driven by the high uneconomical "investment in content" is still not visible to the market and is not factored in the shares, in my view. As we move into 2017, and with the first round of bidding for European Champions League due in March 2017, I expect the focus to move more towards the analysis of the "returns" on these investments. With SKY likely to be emboldened by Fox's intended acquisition and with possibly a greater budget, BT will need to bid even more than the £897m bid of 3 years ago, in order to win the rights, in my view.
**** UNACHIEVABLE BREAK-EVEN POINT IMPLIES THAT CONTENT INVESTMENT REMAINS A BOTTOMLESS PIT FOR BT - I calculate the break-even point of a BT TV sports customer at nearly £31.8/month. The argument that the break-even point of £31.8/m will decline in time as more subscribers join BT TV’s platform is absolutely valid but how much will the cost of acquiring the sports right inflate by? In the last EPL auction BT had to pay a premium of 30% over the price they had paid 3 years earlier. The European Championship/Europa league auctions are coming up and all indications are that the next EPL auctions are likely to increase significantly in value. That leaves us with two conclusions:
** 1) BT has to continue to charge premium prices for its broadband service vis-à-vis Vodafone and others operators in order to underwrite its content (TV) costs. However with Vodafone now undercutting their broadband cost as they do not need to subsidize their mobile customers, BT has no option but to reduce prices or face losing customers once the contract terms end. In either case it will be difficult to see a longer term winning scenario or
** 2) BT refuses to renew or bid for any further football rights. In such a scenario BT will be back to square one, i.e. where it was before the launch of BT Sport and therefore will face the potential loss of its broadband customers especially at a time when other operators such as Virgin Media have upgraded the reach and the quality of their network. No winning scenario here either.
**** THE CONCLUSION IS CLEAR : Under the current pricing model and given the competitors positioning it is hard to justify how BT can make a long term economic return by investing in inflating sports rights.
**** NEXT A DIVIDEND CUT: THE 15-20% DOWNGRADE IN FCF (£550m-£700m downgrade) removes all the safety net that BT had. Previously we had calculated that after Pension payments and share buy-backs BT will have around £2.3bn of FCF for next year. With dividends guided to increase by 10% per annum, by FY18/19 this implies a payment of £1.65bn. That leaves an FCF post FY18/19 of £2.3bn - £1.65bn = £650m for spectrum license costs, increases in unexpected content costs, etc. Today's downgrade of £550-700m removes all that safety net and hence any rise in content costs in the upcoming auctions will pressure the dividend from an organic perspective. Sure - BT can tap the debt markets to pay the dividend - but I don't think that investors will reward the company for that strategy! SELL."

Morgan Stanley Overweight 307.25 490.00 400.00 Reiterates

Interims tomorrow - should be quite interesting.....

Certainly worth keeping an eye on this one for a possible entry point next week.

StockMarketWire.com
BT Group's reports good progress across most of the business in the third quarter but admits this has been overshadowed by the results of investigation into its Italian operations and its outlook.

Reported revenue rose 32%, and underlying revenue excluding transit adjusted for the acquisition of EE was down 1.5%.

Reported earnings per share fell 59% and adjusted earnings per share fell 24%.

Adjusted EBITDA rose by 18% to £1,870m with underlying EBITDA adjusted for the acquisition of EE down 8%.

Total adjustments relating to the investigation of its Italian business amount to £268m for prior year errors, for which it has revised prior periods, and a specific item charge of £245m for changes in accounting estimates (£145m in Q2 and £100m in Q3).

Net cash inflow from operating activities totalled £1,515m, down £178m and normalised free cash flow of £606m was down £298m.

Outlook: 2016-17 underlying revenue1 broadly flat, EBITDA of c.£7.6bn, normalised free cash flow3 of c.£2.5bn.

2017/18 underlying revenue1 broadly flat, EBITDA broadly flat, normalised free cash flow of £3.0bn - £3.2bn.

Chief executive Gavin Patterson said: "The good progress we're making across most of the business has unfortunately been overshadowed by the results of our investigation into our Italian operations and our outlook.

"We've undertaken extensive investigations into our Italian business, including an independent review by KPMG, and I am deeply disappointed with the unacceptable practices by some that we've found.

"This has no place at BT, and it undermines the good work we're doing elsewhere in the Group. We are committed to ensuring the highest standards across the whole of BT.

"We face a more challenging outlook in the UK public sector and international corporate markets but we've seen record growth at EE, strong momentum in Consumer, and our highest ever fibre net connections in Openreach.

"Customer experience remains a top priority. EE is now answering 100% of its customers' calls in the UK and Ireland.

"In Openreach, missed appointments have halved year on year.

"We'll continue to invest to ensure our service levels improve and that our customers see the benefit.

"We are pushing ahead with reforms at Openreach, particularly on governance and customer service and continue to believe an agreement can be reached with Ofcom on its Digital Communications Review.

"We think these changes address Ofcom's concerns and can form the basis for a fair, proportionate and sustainable settlement."

Not looking to clever is my conclusion so avoid for the moment.

Skinny's fish is currently looking like shark bait!

Talking of Skinny, where is he?

27 Jan Haitong Securities Under Review 305.80 - - Under Review
27 Jan Deutsche Bank Sell 305.80 325.00 325.00 Reiterates

StockMarketWire.com
BT Sport has confirmed that it will remain the exclusive UK home of all UEFA Champions League and UEFA Europa League football.

Following a competitive auction process, BT has secured the rights until the end of the 2020-21 season that for the first time brings together exclusivity across all live games, highlights and in-match clips of both competitions.

BT said: "The UEFA Champions League is set to be even stronger from 2018/19, with a minimum of four participating teams now guaranteed from each of England, Spain, Germany and Italy, resulting in more games between the top European teams.

"Fans will also be able to enjoy UEFA Champions League 'double header' nights, as live matches will kick off at both 6pm and 8pm during the Group Stage.

BT said it woud continue to show UEFA matches using the latest broadcast innovation and technology, with games made available in 4K ultra high definition with Dolby Atmos sound, and via its the award-winning BT Sport App.

BT consumer chief executive John Petter said: "We are delighted to have renewed these rights.

"The UEFA Champions League and UEFA Europa League are two of the best competitions in the world and we would like to thank UEFA for choosing us as their exclusive broadcast partner in the UK.

"The UEFA Champions League is due to get even stronger and we are delighted that fans will be able to enjoy two live matches a night for the first time."

Goldman Sachs today downgrades its investment rating on BT Group PLC (LON:BT.A) to neutral (from buy) and cut its price target to 360p (from 370p).

BT AND OFCOM REACH AGREEMENT ON FUTURE GOVERNANCE OF OPENREACH

Openreach to be a legally separate company within BT with its own Board

Around 32,000 employees to transfer once pension arrangements are in place

Openreach Limited to have its own brand without the BT logo

BT and Ofcom have reached agreement on a long-term regulatory settlement that will see Openreach become a distinct, legally separate company with its own Board1, within the BT Group. The agreement is based upon voluntary commitments submitted by BT that the regulator has said meet its competition concerns.

Once the agreement is implemented:

· Around 32,000 employees will transfer to the new Openreach Limited following TUPE consultation, and once pension arrangements are in place.
· Openreach Limited will have its own branding, which will not feature the BT logo.
· The Openreach CEO will report to the Openreach Chairman with accountability to the BT Group Chief Executive with regards to certain legal and fiduciary duties that are consistent with BT's responsibilities as a listed company.

Openreach, which builds and maintains the tens of millions of copper and fibre lines that run from telephone exchanges to homes and businesses across the UK, will assume greater independence under its own Board of Directors.
The agreement is intended to be comprehensive and enduring, helping to ensure the UK telecommunications market remains one of the most competitive in the world. Hundreds of telecoms companies already use Openreach and its national network on an equivalent basis, and many others are competing with them. That will continue with enhanced safeguards to ensure all of Openreach's customers are treated equally.
Gavin Patterson, BT Chief Executive, said: "I believe this agreement will serve the long-term interests of millions of UK households, businesses and service providers that rely on our infrastructure. It will also end a period of uncertainty for our people and support further investment in the UK's digital infrastructure.
"This has been a long and challenging review where we have been balancing a number of competing interests. We have listened to criticism of our business and as a result are willing to make fundamental changes to the way Openreach will work in the future."

The market likes that, up nearly 4 1/2%!

Hmmm.... which presumably means that Openreach was a bit of a millstone around BT's neck?
Which makes Openreach very unattractive as an investment.

Goldman Sachs input:
1 ) We would not expect a legally separate Openreach to make materially different strategic or investment decisions compared to if it were a legal part of BT. Crucially, we believe Openreach, as a legally separate entity, will continue to prioritise ‘Future of Fixed’ G.fast copper upgrade technology investment (subject to conditions set in an upcoming Ofcom “WLAR” review), which we see as value accretive. This compares to fibre-to-the-home (FTTH), which we see as likely value destructive. While today’s news is a positive for BT in our view, we expect further ducts and poles regulation to come with the WLA.
2) It does not appear that BT has had to commit to any material FTTH roll-out to reach the agreement. This was a key concern expressed by investors, with a concern that FTTH would be value destructive.
3) BT will continue to set the capex budget for Openreach. The limit with regards to capex decisions for Openreach is £1 00 mn and anything above needs to go to BT board.
4) While Openreach management will report to an independent Openreach board, the reporting line into BT Group will not be severed. Ofcom states “Executives will be accountable to the new Board. Openreach’s Chief Executive will in future be appointed by, and accountable to, the Openreach Board. BT Group will be able to veto appointment of the Openreach CEO, but only on notification to Ofcom. The Openreach Chief Executive will then be responsible for other executive appointments, and will report to the Openreach Chair – with a secondary accountability to the Chief Executive of BT, limited to necessary legal, fiduciary or regulatory obligations.” The BT CFO is on the Openreach board.
5) There is limited detail on the pension allocation.
Investor focus has been on Openreach treatment for the last 18 months and this has been seen as the key regulatory uncertainty. As such, we see today’s announcement as a material positive for the shares. But as we state above, we do not believe Openreach decision-making will change materially as to the method of upgrading the network or how to monetise it.
However, there are two more ongoing uncertainties for BT:
1 ) Wholesale Line Access Review (decision expect this “spring”) - this is potentially more influential to BT returns. In this, Ofcom will decide whether Openreach will have wholesale pricing flexibility on G.fast. This is critical to its monetisation of the network upgrade.
2) B2B - following the recent profit warning, this has resurfaced as a business unit with limited visibility, at least for investors.

Black Rock go below 5%