Vodafone shares rise sharply supported by Covid-19 vaccine news

By: Stanko Iliev
Stanko Iliev
Stanko dedicates himself to providing investors with relevant information they can use to make investment decisions. He loves the… read more.
on Nov 12, 2020
  • Vodafone's dividend is safe and this stock is not overvalued
  • Vodafone shares have been moving in an uptrend last several days and for now, there is no signal of the trend
  • If the price jumps above $16 the next target could be located at $17 or even $18

Vodafone (NASDAQ: VOD) shares have advanced from $13.3 above $15.7 in less than three weeks and the current price stands around $15.4. The technical picture implies that the price may advance even more this November but there are also some obvious risks when it comes to buying Vodafone shares.

Fundamental analysis: Vodafone is positioned to weather the COVID-related storms

Vodafone shares have been moving in an uptrend last several days and for now, there is no signal of the trend reversal. Drugmaker Pfizer announced that it will have a coronavirus vaccine ready in the United States by the end of this year and this adds further support to Vodafone stock.

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When trading this stock, investors should have in mind that Vodafone is a stable company with a good position on the market. Vodafone released Q1 earnings results, total revenue declined only 2.8% Y/Y, mainly due to COVID-19 impacts but adjusted EBITDA outlook for FY 2021 remains unchanged.

The company increased its revenue in 2019 to $49.56B from $48.98B in 2018 and the growth projects will ensure that the numbers will be moving up in the future. If we compare total stockholders’ equity of $69B and the market capitalization of $41B, we can notice that this stock is not overvalued.

There are also some risks when it comes to buying Vodafone shares but this stock is attractively valued currently and according to analysts, Vodafone is positioned to weather the COVID-related storms.

The US stock market is still supported by upbeat over the prospect of a divided Congress, COVID-19 vaccine news and less risk of major policy changes. Joe Biden won the presidential election in his birth state of Pennsylvania last Saturday and become 46th president of the United States.

Technical Analysis: Bulls are in control of the price action

Data source: tradingview.com

When we take a look at the chart above ( one year period), we can see that the price of this stock has weakened from $21 to $11.4 and then started to raise. On this chart, I marked important resistance and support levels.

The important support levels are $15 and $14, $16, $17 and $18 represent the resistance levels. If the price jumps above $16 it would be a “buy” signal and we have the open way to $18.

Rising above $18 supports the continuation of the bullish trend and the next price target could be located around $20. If the price falls in the upcoming period, every price in a range from $12 – $14 could be a very good opportunity to invest in Vodafone shares.

Summary

Vodafone shares have been moving in an uptrend last several days and for now, there is no signal of the trend reversal. Vodafone’s dividend is safe and the company is handling the coronavirus threat very well. Vodafone released Q1 earnings results, total revenue declined only 2.8% Y/Y, mainly due to COVID-19 impacts but adjusted EBITDA outlook for FY 2021 remains unchanged. Drugmaker Pfizer announced that it will have a coronavirus vaccine ready in the United States by the end of this year and this adds further support to Vodafone stock.

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