Vodafone’s share price (LON:VOD) on an upward trajectory today as HSBC hiked its rating on the blue-chip telecoms group. Proactive Investors quoted the broker as commenting that the time was right to buy shares in the telco, with trends ‘set to improve’.
As of 09:56 BST, Vodafone’s share price had added 1.95 percent to 125.72p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.60 percent higher at 7,274.50 points. The telco’s shares have given up more than 35 percent of their value over the past year, as compared with about a 5.6-percent fall in the Footsie.
HSBC comments lift Vodafone share price
HBSC upgraded Vodafone to a ‘buy’ today, in the wake of the blue-chip telco’s recent full-year results which saw the company post an annual loss and slash its payout to shareholders. Proactive Investors, however, quoted the broker as commenting in a note that the fall in the Vodafone share price since the dividend cut had brought the yield on the shares down to 6.4 percent and presented ‘an attractive entry point’ for new investors.
Following comments from the FTSE 100 group’s management, the analysts believe that the tone of the company’s commentary “should get progressively brighter,” starting with the first-quarter statement in July and ‘likely’ approval of the Unitymedia acquisition.
While noting that ‘material risks remain’ as Vodafone’s markets remain highly competitive and performance “must improve and missteps be eliminated” in a sector which “remains resolutely out of favour”, HSBC reckons that the shares’ near 50-percent fall since the start of last year and the removal of the dividend-related overhang have now created a sufficiently attractive opportunity for a rating upgrade from ‘buy’ to ‘hold’.
Other analysts on blue-chip telecoms group
Numis Securities reaffirmed the telco as a ‘buy’ earlier this month, without specifying a target on the Vodafone share price. According to MarketBeat, the FTSE 100 group currently has a consensus ‘buy’ rating and an average valuation of 186.61p.