The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
Vodafone (first-half earnings 14 November)
Good customer growth suggests that the market may be understating the potential of higher earnings. Earnings were up 17.00% in the last full year, with a steady expansion of market share suggesting more good times to come.
The current worry is that the dividend, currently 6.1%, is not fully covered by earnings. Further increase in 4G customer numbers would help improve cash flow. Vodafone is expected to report earnings per share (EPS) of 5p, up 62.00% year-on-year, but revenue is expected to fall 14.00% to £23 billion.
If the shares continue to turn lower, then they will have created a new lower high, maintaining the downtrend off the May 2015 highs. First 215p, and then the September low at 205p come into play. A move above the recent highs, around 223p, would suggest 230p, and then 235p are the next targets.