Observation16 Oct 2018 11:44
I do not recall seeing this article, so sorry if has. Worth a read.
Vodafone was tipped as a 'buy' in the Sunday Times' Inside the City column, with the mobile telecoms giant down 35.4% this year and unusually trading at a discount to its European peers. Concerns for investor have been the investment needed to buy 5G mobile airwave spectrum and plans to acquire European cable networks from Liberty Global. Then chief executive Vittorio Colao quit and new worries reared their heads about tougher Southern European competition.
October's auction of Italian spectrum saw Vodafone forced to splash out €2.4bn, more than the previous guidance for €1.2bn spending over the entire year. Analysts have since cast doubts on the company's generous dividend, with the shares yielding above 8%.
But now, with the shares at their lowest level since the summer of 2009, "the risks are more than priced in", the column said. Analysts at Citi feel there is no imminent risk to the dividend, while those at Redburn say current forecasts for full year underlying profits of €13.9bn, a 5% downgrade from €14.6bn previous expectations, is not too shabby.