BoA Merrill Lynch upgrades Vodafone as headwinds 'baked in'

(Sharecast News) - There is "light at the end of the tunnel" for Vodafone, said Bank of America Merrill Lynch on Wednesday, upgrading the mobile telecoms group to a 'buy' rating.After a "torrid" 12 months of Southern European competition trouble, high spectrum costs and Indian funding issues, these headwinds "are now passing and increasingly baked into forecasts", Merrill analysts said.This year and next, Vodafone is expected to return to " marginal" top-line growth but with around 3% EBITDA growth as all core regions contribute positively.A dividend cut is already priced in, the analysts believe, addressing one "sore point" and "there is potential to revisit" as the pending Liberty deal "would add leverage and a possible credit downgrade, but also double-digit earnings and cash flow per share increases".Possible disposals and network sharing deals could be further potentially positive catalysts.The upgrade came with a share price target of 200p.