Vodafone is expected to report a 26% drop in earnings per share, to 4.9p, while revenues are expected to weaken by 3.5%, to £53.9 billion. There may be some discussion of the group’s pay TV ambitions, which reportedly have been junked and cost the company a significant amount in penalty fees. This does not remove the group’s need to continue expanding into all media types, including content, in order to maintain its relevance against rivals. Investors should also look for comments on currency impacts, given it has revenues in sterling, euros and rupees, and needs to maintain competitiveness in the cut-throat Indian market, which could see margins hit.
A substantial rally in the shares from the April low has taken the price back to the 200-day simple moving average (SMA) at 211p, which it last reached in mid-March, and fell back. However, the break of the post-August 2016 downtrend that took place in March, which was followed by a sustained pullback that held above the trendline, suggests buying strength, with 215p the first target.