Bernstein, which reduced BT to ‘market-perform’ with a fair value of 385p, said “much good can be said” about BT and its investment case, although a good deal of that was well-understood and priced into its shares.
The broker said there were four potentially big risks on the horizon that could limit a rise in the stock.
BT, which has launched two sport channels to compete with rival BSkyB last year, could overspend on programming, particularly at the next auction of rights to show Premier League football.
Bernstein also said BT could face a renewed competitive challenge from rivals, particularly Virgin which has embarked on a cost-cutting drive, if the ‘triple-play’ broadband, fixed line and TV market fails to expand as much as expected.
Other risks included a less favourable regulatory regime for fibre networks and a bigger-than-expected increase in the company’s pension deficit.
Bernstein said: ‘None of these risks are necessarily imminent, but all are potentially significant, so we find it hard to find a compelling higher valuation.’