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Vodafone share price: what’s the outlook as Barclays remains bullish?

After recording a major loss last financial year, which helped send its share price to lower levels, Barclays is adamant that Vodafone is still a ‘clear value opportunity’.

Vodafone ended 2018 on a low note after it recorded a whopping €7.6 billion loss, driven by increased competition in Spain and Italy, with its share price losing more than 13% of its value so far this year.

However, the telecoms company’s stock was offered some support last week, after Barclays analysts reiterated their bullish outlook for the business despite the myriad of challenges it faces.

Vodafone remains a ‘clear value opportunity’

Last week, analysts at Barclays repeated their ‘overweight’ rating for the stock and a target price of 200p a share.

‘We still see a clear value opportunity, and potentially near-term catalysts to help unlock the discount to our 200p price target, with hopefully no operational deterioration in 1Q,’ Barclays said in a note to investors.

Vodafone’s share price is trading at 132p a share as of 14:45 GMT on Tuesday.

Learn more about trading Vodafone and other UK stocks here.

Vodafone slashes dividend to fund 5G rollout

Barclays' support of Vodafone in spite of the many challenges the telecoms company is facing at the moment is due to its strong growth strategy, with the business slashing its dividend by 40% to fund its 5G rollout.

Vodafone also plans to use the capital raised from the dividend cut to pay down debts and strengthen its balance sheet.

The British telecoms company is also expected to get a major earnings boost once its €18 million acquisition of Liberty Global’s cable networks in Germany and Eastern Europe is completed later this month.

In fact, analysts calculate that the deal will add €1.7 billion to Vodafone’s underlying earnings in 2019 and an additional €200 million of free cash flow.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material 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 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. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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