UBS continues to see Vodafone (LON:VOD) as a ‘buy,’ after the telco’s organic service revenues ended the fourth quarter ahead of analysts' estimates, WebFG News reports. The comments came after the blue-chip group updated investors on its full-year performance yesterday, further announcing that its chief executive will step down later this year.
Vodafone’s share price, which fell sharply yesterday on the news of Vittorio Colao’s departure, has extended its losses today, having given up 1.12 percent to 196.16p as of 13:33 BST. The shares are underperforming the broader UK market, with the benchmark FTSE 100 index having climbed marginally into positive territory and currently standing 0.05 percent higher at 7,726.53 points.
UBS reaffirms Vodafone as ‘buy’
UBS reiterated its ‘buy’ rating on Vodafone today, with a price target of 270p, arguing that overall growth drivers for the company remained intact, with mobile data monetisation feeding through in most markets, strong growth in broadband and market share gains in Enterprise.
“We reiterate our view that the bulk of the group is performing well and will benefit from cost savings,” the analysts pointed out, as quoted by WebFG News.
HL points to new direction for telco
Citywire meanwhile quoted Hargreaves Lansdown’s analyst George Salmon as commenting that while Vodafone’s results had showed ‘reasonable underlying progress,’ the main story was ‘the direction of travel’ as the telco steps away from emerging market growth to focus on Europe, following its €18.4-billion deal to Liberty Global’s operations in Germany, the Czech Republic, Hungary and Romania.
“At present, this looks to be no bad thing,” the analyst pointed out. “The Liberty deal will come with significant cost reduction and cross-selling opportunities, and opens up new growth opportunities in central and Eastern Europe.”