Source: Sharecast
Admittedly, over the preceding 12 months investors had endured an "intense rollercoaster" ride, JP Morgan said.
The stock price had more than doubled from 100.0p in October 2020 to 200.0p by June 2021 to the improved regulatory backdrop, only to then yield over two-thirds of those gains due to worries around Virgin Media's fibre/wholesale ambitions.
But the company's second quarter update had shown that BT had lowered its cumulative fibre capex envelope, guiding towards a boost to equity free cash flows in excess of £1.5bn by 2030 on the back of reductions in operating and capital expenditures alone.
On top of that, all divisions were now seen to be on track for sustainable revenue and margin gains and the tax loss carry forward was increased from £4bn to £5bn.
Furthermore, in parallel, at its third quarter results, Liberty had left investors questioning if Virgin Media would really expand Lightning o 22m homes or win a major wholesale deal, they added.
Hence, they raised their long-term estimates for the company's earnings before interest, taxes, depreciation and amortisation by 4% per annum and their estimate for its EFCF by 7-20% per annum.
They also now saw EFCF more than trebling from £1.2bn for the year ending in March 2022 to £3.7bn for that finishing in March 2030, for a long-term yield of 20%.
The analysts kept their recommendation for the shares at 'overweight'.
