Interactive Investor argues that while Vodafone (LON:VOD) might not be out of the woods yet, it has ‘established a positive direction of travel,’ Citywire reports. The comments came after the telecoms giant updated investors on its interim performance yesterday, recording a loss for the first half of its financial year, while lifting its outlook for free cash flow and keeping its payout to shareholders unchanged.
Vodafone’s share price rose in the previous session as investors cheered the telco’s results, adding 7.79 percent to 155.6p, and lending support to the benchmark FTSE 100 index, which ended trading 0.01 percent higher. The group’s shares have slipped marginally into the red this morning, trading 0.23 percent lower at 155.24p as at 08:01 GMT, compared with a 0.54-percent dip in the Footsie.
‘Positive direction of travel’
Citywire quoted Interactive Investor analyst Richard Hunter as commenting yesterday that the “bulls of the stock may well see this as something of a turning point” for Vodafone due to increased free cashflow and the fact the dividend has been held.
“Vodafone is not out of the woods but it has established a positive direction of travel,” the analyst elaborated, adding that “this should come as some relief to long-suffering investors who have had a torrid time”.
Other analysts on Vodafone
Reuters meanwhile quoted Helal Miah, analyst at The Share Centre, as attributing the previous session’s rise in Vodafone’s share price to the telco’s upgraded guidance for free cash flow.
“Essentially it is the pot of money that is used to pay back debt and pay the dividend,” the analyst explained, adding that “having a bigger pot of money raises hopes that the dividend isn’t going to be cut”.