Vodafone share price outperforms even as UBS trims valuation

Analysts point to Italy costs and UK earnings concerns

Vodafone share price outperforms even as UBS trims valuation

Shares in Vodafone (LON:VOD) have climbed higher in today’s session, outperforming the broader market rally, even as UBS trimmed its price target on the telecoms giant. Proactive Investors reports that the analysts have made the cut due to higher costs at the company’s business in Italy and expected lower earnings at home.

As of 13:50 BST, Vodafone’s share price had added 2.17 percent to 147.16p, outperforming the broader market rally, with the benchmark FTSE 100 index currently standing 1.57 percent higher at 7,048.56 points. The group’s shares have given up more than 31 percent of their value over the past year, as compared with about a 6.4-percent fall in the Footsie.

UBS trims valuation on Vodafone

UBS, which has a ‘buy’ rating on Vodafone, lowered its price target on the shares from 250p to 230p today. Proactive Investors quoted the analysts as pointing to the expected impact of higher costs at its Italian business and the prospect of weaker earnings in the UK as well as a lower valuation for the VodafoneZiggo joint venture.

“Italy is being impacted by the entry of Iliad into the mobile market and the group is being further impacted by handset financing drag in the UK – accounting treatment means revenues are reclassified from service revenues into equipment revenues,” the broker explained in a note to clients, adding, however, that it expects Vodafone’s “second quarter results will show that the broader group remains resilient and that underlying estimates should remain underpinned”.

Other analysts on telecoms giant   

Earlier this month, Credit Suisse, which rates Vodafone as a ‘buy,’ set a price target of 225p on the shares. According to MarketBeat, the blue-chip telco currently has a consensus ‘hold’ rating and an average price target of 228.52p.

Vodafone is scheduled to update investors on its interim performance on November 13.

As of 14:01 GMT, Monday, 29 October, Vodafone Group plc share price is 148.06p.

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