Vodafone: Berenberg upgrades to 'buy'

(CercleFinance.com) - Berenberg on Wednesday upgraded the Vodafone share from "hold" to "buy" and raised its corresponding target price from 148 pence to 155 pence.


In a note to clients, the German broker said that investors often dislike telecoms companies, due to: (1) a lack of growth, (2) too much debt and (3) business complexity, with Vodafone sitting in all three categories.

However, Berenberg said that as from 2021/22, the British mobile giant giant will report consistent top-line growth, steadily reducing its net debt/EBITDA ratio towards the bottom of its target range, while further simplifying its portfolio.

"We believe this should act to reduce its valuation discount versus the sector", the broker wrote in the report.

Vodafone shares were up 2.5% in London after this upgrade.

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