Hargreaves Lansdown argues that Vodafone (LON:VOD) is facing stiff competition while finding some solace in emerging markets, Citywire reports. The comments come after the blue-chip telco updated investors on its quarterly performance yesterday, posting a drop in revenue on the back of accounting changes and currency headwinds, while reaffirming its full-year guidance.
Vodafone’s share price fell in the previous session, giving up 1.44 percent to close at 175.10p. The stock underperformed the broader UK market, with the benchmark FTSE 100 index giving up 50.79 points to close 0.66 percent lower at 7,658.26.
HL weighs in on telco’s results
Citywire quoted Hargreaves Lansdown’s analyst George Salmon as commenting yesterday that Vodafone had to deal with the fact that ‘consumers want a better deal every time they renew’ and that price was the main differentiator.
“That means competition between networks can be fierce,” the analyst pointed out, adding that, unfortunately, that was something which the FTSE 100 telco was “finding out the hard way, with pricing in Spain being reassessed as a result of extra competition, and the Indian business on the cusp of being combined with a rival in an effort to front up to new challenges”.
Salmon, however, reckons that emerging growth was strong and more European customers were taking on multiple services.
“Bundling TV, phone, and broadband together is Vodafone’s solution to the age-old problem of customer retention, so investors will be keeping a keen eye on progress,” he noted.
Other analysts on Vodafone
UBS and Barclays, which see the FTSE 100 telco as a ‘buy,’ set price targets on the stock of 250p yesterday. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 240.45p.