BT Group share price has crashed in the past few weeks, moving from the year-to-date high of 218p to the current 194p. It has moved to the lowest level since July 24 this year, but is still up by over 48% higher than the year-to-date low. Here are some of the top reasons why it has plunged and whether it will rebound.
BT Group share price has plunged because of profit-taking
One of the main reasons why the BT share price has plunged in the past few days is that investors are booking profits after a highly successful start of the year.
BT started the year at 134p and then surged to a high of 218p. At its peak, it was up by 135% from its lowest level in 2024. It is common for an asset to pull back or have a retracement after having a strong surge in a while.
This performance is in line with what has happened with the FTSE 100 Index, which has pulled back a bit from the year-to-date high of £9,356 to the current £9,235.
BT’s financial results and growing capital expenditure
The BT share price has also retreated after it published its first-quarter results, which showed that its business was struggling across the board.
BT Group’s consumer revenue dropped by 3% in the quarter to £2.32 billion, while its business segment dropped by 6% to £1.8 billion. The business segment has constantly underperformed the other businesses because of the robust competition in the industry.
Read more: BT Group share price hits key level: can it surge to 200p?
BT Group stock also plunged after its profitability worsened. The pre-tax profit was £468 million, down by 10% from the same period last year because of high financing costs and depreciation.
Additionally, the company announced a boost in capital expenditure that was higher than expected. It plans to spend about £5 billion this year, higher than the consensus.
Meanwhile, analysts have also downgraded its outlook. The median revenue estimate for the second quarter is £4.97 billion, down by 2.2% from the same period last year.
Analysts also expect that its full-year revenue will be £19.9 billion, down by 2.2% from last year. The annual revenue will likely remain in this range in the coming years.
Still, on the positive side, the company is cutting costs and slowing its OpenReach spending in the coming years.
BT Group stock price technical analysis
BT stock chart | Source: TradingView
Technicals have also contributed to the ongoing BT Group stock price dip. The decline happened after it formed a double-top pattern at 217.3p. This is one of the most bearish patterns in technical analysis.
The stock has moved below the 50-day and 100-day Exponential Moving Averages, while the MACD and the Relative Strength Index (RSI) have continued falling.
Therefore, the most likely scenario is where the stock will continue falling as sellers target the support at 180p. The alternative scenario is where the stock rebounds and hits the year-to-date high of 218p.
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