Numis has turned bullish on Vodafone (LON:VOD), arguing that the telco’s prospects for sustained and accelerated earnings growth remain intact, Proactive Investors reports. The move comes after the telco updated investors on its quarterly performance last week, posting a drop in revenue while reaffirming its full-year outlook for earnings growth.
Vodafone’s share price, however, has fallen deep into the red in London in today’s session, having given up 3.01 percent to 212.90p as of 12:57 GMT. The stock is underperforming the broader market selloff which has seen the benchmark FTSE 100 dip 1.32 percent to 7,345.46 points so far today. The telco’s shares have added just under 10 percent to their value over the past year, as compared with about a four percent rise in the Footsie.
Numis turns bullish on Vodafone
Numis lifted its rating on Vodafone from ‘add’ to ‘buy’ today, leaving its price target on the shares unchanged at 270p. Proactive Investors quoted the analysts as pointing to the telco’s business in India, noting that it was too early to believe that the FTSE 100 group will have to inject more cash into the business which continued to contend with price competition. Vodafone is currently merging the division with local provider Idea Cellular amid stiff competition in the country’s telecoms market.
Numis further commented on Vodafone’s early talks to buy some of Liberty Global’s assets in the continental European countries where they both operate.
“Buying Liberty out of Germany would double Vodafone’s cable footprint to c.60 percent of the country,” the broker’s analyst John Karidis said, as quoted by Proactive Investors.
Other analysts on telco
Royal Bank of Canada reiterated its ‘outperform’ rating on Vodafone today, valuing the shares at 270p, while Barclays reaffirmed the telco as an ‘overweight’ on Friday, with a price target of 280p on the stock. According to MarketBeat, Vodafone currently has a consensus ‘hold’ rating and an average valuation of 248.79p.