Vodafone Still Undervalued, say Analysts

Despite declining revenues, a rise in mobile and broadband subscribers provides Morningstar analysts with confidence that Vodafone’s business is improving

Allan C. Nichols 28 January, 2019 | 2:02PM

Vodafone

Vodafone has reported third-quarter revenue that was lower than Morningstar analysts’ expectations, but we are maintaining our 250p fair value estimate and narrow moat rating. We believe the shares are significantly undervalued. The firm reported that revenue declined 6.8% year on year versus our full-year projection of a 5.1% drop.

The FTSE 100 firm continues to be hurt by currency movements, particularly the Turkish lira. In local currency terms, Vodafone’s Turkish business did very well, growing 14.8%, but revenue fell 24% in euro terms. However, with the lira recovering about 25% since its low during Vodafone’s second quarter, results from the country should improve starting in the firm’s fiscal 2020 second quarter.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Vodafone Group PLC123.42 GBX0.64

About Author

Allan C. Nichols  Allan C. Nichols

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