Goldman Sachs Reiterates Positive View On BT Group, Virgin Media (BT, VMED)

Goldman Sachs is out with a research report on the United Kingdom telecom services sector this morning. In the report, Goldman Sachs reiterated its Buy ratings on BT Group BT and Virgin Media VMED. In the report, Goldman Sachs states, "BT has reported a >30% share of broadband net adds (and a >40% share of DSL net adds) for the last eight quarters, largely reflecting the success of its plusnet discount brand. Although BT has pushed Sky Sports less aggressively this quarter, suggesting lower net add share, we still expect a solid outcome. Our Buy on BT is not predicated on structural improvement in its Retail business, which in our view remains challenged. Rather, we see scope for material upside in the pension valuation/from cost-cutting." In regards to Virgin Media, Goldman Sachs notes, "VMED's broadband net add share has ranged from 10%-20% over the last eight quarters, and is likely to be at the lower end of this range once again given Sky's competitive aggression. We note that VMED's goal of modest revenue growth (driving strong operating leverage) does not rely on broadband net add growth, but can also be achieved via up-selling premium services, expanding its footprint, and growth in Business/Mobile." Shares of BT Group were trading at $28.84 at the time of posting, up 0.35% from Wednesday's market close. Shares of Virgin Media were trading at $25.67 at the time of posting, up 0.63% from Wednesday's market close.