In an internal note, the investment house's Laurence Heyworth said BT was the cheapest quoted European telephone group.
He is not looking for exciting developments and believes the first quarter's figures may not be much different from last year's pounds 757m.
But he is encouraged by the recent share performance and the strength of the core business. If BT does produce any surprises 'they will be on the upside'.
The fully-paid shares rose 6.5p to 383p and the partly-paid (the last 140p call is due in October) 5.5p to 264.5p. The Robert Fleming short-term target price is 420p.
The rest of the market drifted lower although, despite the latest one-day rail strike, trading was the highest for some days. Two programme trades, thought to be conducted by US investment houses, inflated what would have been deeply subdued turnover.
The FT-SE 100 index closed 18.3 points down at 2,946.7 but the second-line FT-SE 250 index managed modest progress, up 2.4 at 3,438.2. Government stocks weakened.
General Electric Co was one depressing influence on the blue- chip index. Another pedestrian profit performance and uninspiring dividend increase left the shares nursing a 24p fall to 270p. Seaq put turnover at 29 million.
But Dixons overcame the expected poor figures to improve 19p to 189p, with the market encouraged by the dividend increase and more positive trading statement.
Supermarkets remained under pressure. Kwik Save continued to feel the impact of NatWest Securities caution, falling another 17p to 527p. The shares have lost 39p since the securities house's analysts called on the food retailer on Monday.
J Sainsbury failed to draw comfort from its trading statement, falling 6p to 396p and dragging Tesco down 4.5p to 216p.
Associated British Ports rose 9p to 260p on Smith New Court support and Blue Circle Industries edged forward 6p to 306p on NatWest interest. But a rumoured Cazenove downgrading left Morgan Crucible, the industrial components and materials group, 16p lower at 326p.
Banks were weak as competition intensified with the Midland pounds 10 giveaway. Barclays fell 11p to 528p and HSBC, Midland's parent, lost 10.5p to 678.5p. The Treasury review of the Building Society Act was another inhibiting influence.
Life insurers remained strong. Britannic put on 14p to 421p, Refuge 6p to 286p and United Friendly 33p to 523p.
Tottenham Hotspur achieved a 5p gain to 94p as the Football Association increased its fine, maintained the FA cup ban but reduced the points penalty to six from 12.
Taunton Cider bubbled 12p higher to 162p on its results but Boddington, the pubs chain, shaded to 252p following a lunchtime meeting, thought to be with Robert Fleming.
Betterware, the door-to-door selling group, had another unsettling session. Tuesday's cautious trading statement pushed the shares down to 84p in early trading. They closed at 91p, a two-day fall of 13p.
Avesco, the broadcasting equipment group, was, on the surface, the day's worst performer, down 45.5p to 10.5p. But the reaction was due to the split from VideoLogic, which started quoted life on its own account. Against the 45p hive-off price VL touched 49p, closing at 47p.
British Airways continued to enjoy the reaction to the sharp increase in its first-quarter passenger levels. The shares, helped along by bullish analyst comments, rose 11p to 403p.
Hawtal Whiting, the car designer, continued its remarkable progress following last month's refinancing package when the shares hovered at 60p. They rose a further 23p to 128p with the nil- paid rights up 20p to 58p.
Motor distributors offered a grudging response to the latest increase in car sales. SG Warburg is keen on the sector. Cowie advanced 8p to 257p and Lex Service 4p to 425p.
Wilshaw, a distributor of engineering and industrial products, edged forward to 51p. Year's results are due today. About pounds 3m is expected against pounds 2.1m. There is also talk that a large shareholding is about to change hands.
The FT-SE 100 index fell 18.3 points to 2,946.7, but the FT-SE 250 edged forward 2.4 points to 3,438.2. Turnover was 506.2 million shares but only 19,089 bargains were registered. The account ends on 15 July with settlement on 25 July.
Barclays de Zoete Wedd has turned seller of Forte. Analysts Charles Mason and Simon M Johnson believe the 'leaner and fitter' hotel group needs an overseas takeover to kick-start its future development, otherwise its highly rated shares are under threat. Profits this year are forecast at a little changed pounds 122m with pounds 162m in the following year. The shares fell 3p to 224p.
Waverley Mining Finance rose 4p to 58p on talk of further production increases at its 49 per cent-owned Monktonhall coal mine in Scotland. One suggestion is output could be lifted to 500,000 tonnes a year. Moves are also afoot at its quoted Australian operations. GFM International, part of Metropolitan Life of New York, paid 58p each for 2 million shares last week.