Vodafone share price heads south as Citi trims rating
Shares in Vodafone (LON:VOD) have fallen into the red in today’s session, underperforming the broader London market, as Citi trimmed its rating on the blue-chip telco. The analysts have noted that they do not expect a ‘significant positive catalyst’ for the shares for another two quarters following the group’s full-year results in May.
As of 13:25 BST, Vodafone’s share price had fallen 1.52 percent to stand at 226.50p, underperforming the benchmark FTSE 100 index which has been little changed in today’s session, and is currently 0.09 percent worse off at 6,676.95 points. The telco’s shares have lost nearly four percent of their value over the past year, but have recovered more than two percent in the year-to-date.
Citi trimmed its rating on Vodafone from ‘buy’ to ‘neutral’ today, while hiking its price target on the stock from 240p to 245p.
“We downgrade Vodafone to ‘neutral’ from ‘buy’ as the stock looks up with events after a decent performance,” the bank’s analyst Simon Weeden was quoted as saying, adding that while the blue-chip telco had “so far ridden out the general political risk in Europe,” the constitutional referendum in Italy in October “could challenge this, among other election risk”.
The analysts added that they also saw potential for greater competitive pressure in Italy with Iliad, the upstart French broadband and mobile operator, positioning to enter the market.
“We update our forecasts and transfer to Euros from sterling, lowering growth in the UK (near term) and Italy (longer term),” Citi concluded.
The comments come with Vodafone mulling over moving its headquarters out of the UK after the country voted in favour of Brexit. The telecoms giant has pointed to uncertainty about how many of the ‘positive attributes’ of being in the EU will remain once Britain has left the bloc.
As of 14:01 BST, Tuesday, 12 July, Vodafone Group plc share price is 226.82p.