Broker snap: Deutsche Bank downgrades Vodafone to 'hold'

Deutsche Bank has lowered its recommendation for Vodafone from 'buy' to 'hold', citing concerns about 'deteriorating growth and cash returns' for the telecoms firm.The broker said that there's "little to cheer" about at Vodafone: "We forecast growth deterioration through calendar 2013 with the outlook for financial FY14 set to confirm declining free cash flow (FCF), no further dividend-per-share (DPS) growth and a scaled down buyback to avoid increased leverage."What's more, analysts said that a Verizon Wireless (VZW) deal - there were rumours that Verizon would buy out Vodafone's 45% stake in the joint venture - is now unlikely to materialise for the time being "due to tax and valuation complexities".Deutsche Bank said it expects organic service revenues to falter further this year (ending March 2013), with a return to positive growth unlikely until 2014. Earnings, meanwhile, should "just about remain positive", the broker says, though this is only due to VZW and Vodafone's buy-back.What's more, deteriorating FCF means that the group's dividend cover is "increasingly at risk", with next year's payout ratio almost at 100%.After lowered its revenue and earnings forecasts, Deutsche Bank has reduced its target price for the shares from 225p to 175p.BC