Barclays Ups Vodafone to Overweight

From today’s issued report by Maurice Patrick and Matthieu Robilliard:

« Vodafone offers a 2018e March 6% DY, and yet many question its sustainability, not just its potential to grow. People also question how Vodafone will be able to monetize data, and the extent to which convergence presents competitive/strategic risk; whether regulatory headwinds will ever end; when cost cutting will be net vs gross; when capex will stop increasing; and whether Vodafone will merge will Liberty Global. We see this as a « rear-view mirror » way of looking at Vodafone, stuck in a 200-230p trading range. However with an EBITDA CAGR of +4-5% in the next three years and positive revenue/cost momentum, we believe the above arguments are far less relevant. We raise estimates (significant change from the past) and our PT to 280p (was 230p), and raise our rating to OW (was EW), We also make Vodafone our Top Pick, replacing Telenor (OW). »

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