Will Vodafone’s Share Price Reach 100p by Christmas?
Vodafone’s share price has shown significant recovery since April, rising approximately one-third to reach 85p as of October 9. While this is a positive trend for current shareholders, many are optimistic about the potential for the share price to hit 100p by Christmas.
Key Upcoming Milestones for Vodafone
The Vodafone group will announce its half-year results on November 11, covering the six months ending September 30. This announcement is crucial as the previous year’s results caused a decline of 8.2% in share price, primarily due to decreased service revenue in Germany, the company’s largest market.
Challenges and Opportunities
In July, a new law prohibited landlords from charging tenants for TV contracts as part of their rents, which poses a significant challenge for Vodafone. Investors are looking for positive indicators of the effectiveness of Vodafone’s turnaround strategy during the upcoming results announcement.
- Investors expect updates on the VodafoneThree business, a result of the merger completed in May.
- Positive news could enhance Vodafone’s share performance.
Market Analysis
Despite the recovery, analysts remain wary. The average 12-month share price target from brokers suggests Vodafone’s shares might drop about 8% from their current position. This skepticism stems from ongoing challenges in the telecom industry, including heavy investments required amid fierce competition leading to lower returns compared to other sectors.
Strategic Changes and Financial Health
To combat these challenges, Vodafone is divesting certain assets and has exited markets like Spain and Italy. This strategy aims to alleviate a substantial debt burden while funding a share buyback program.
| Financial Metrics | Current Value |
|---|---|
| Forecast FY26 Earnings per Share | 8.47 euro cents (7.35p) |
| Current Market Cap | £20.2bn |
| Book Value | €53.9bn (£46.8bn) |
| Dividend for FY26 | 4.5 euro cents (3.91p) |
| Current Dividend Yield | 4.6% |
Final Thoughts on Vodafone’s Future
Many investors find themselves frustrated with Vodafone’s market performance. Although the share price is below £1, there remains a belief that it should exceed this mark with positive half-year results or potential earnings upgrades. The upcoming results may serve as a catalyst for the share price, especially as investors are hoping for a year-end rally. For those seeking undervalued stocks with promising dividends, Vodafone remains a consideration.
