Close Menu
    Facebook X (Twitter) Instagram
    Facebook X (Twitter) Instagram
    StockNews24StockNews24
    Subscribe
    • Shares
    • News
      • Featured Company
      • News Overview
        • Company news
        • Expert Columns
        • Germany
        • USA
        • Price movements
        • Default values
        • Small caps
        • Business
      • News Search
        • Stock News
        • CFD News
        • Foreign exchange news
        • ETF News
        • Money, Career & Lifestyle News
      • Index News
        • DAX News
        • MDAX News
        • TecDAX News
        • Dow Jones News
        • Eurostoxx News
        • NASDAQ News
        • ATX News
        • S&P 500 News
      • Other Topics
        • Private Finance News
        • Commodity News
        • Certificate News
        • Interest rate news
        • SMI News
        • Nikkei 225 News1
    • Carbon Markets
    • Raw materials
    • Funds
    • Bonds
    • Currency
    • Crypto
    • English
      • العربية
      • 简体中文
      • Nederlands
      • English
      • Français
      • Deutsch
      • Italiano
      • Português
      • Русский
      • Español
    StockNews24StockNews24
    Home » Up 10% in a month! What on earth’s going on with the Vodafone share price?
    News

    Up 10% in a month! What on earth’s going on with the Vodafone share price?

    userBy userJuly 9, 2025No Comments3 Mins Read
    Facebook Twitter LinkedIn Telegram Pinterest Tumblr Reddit WhatsApp Email
    Share
    Facebook Twitter LinkedIn Pinterest Email


    Image source: Vodafone Group plc

    Wow! The Vodafone (LSE:VOD) share price has broken though the 80p-barrier for the first time since September 2023. As if that’s not enough, over the past month, the stock’s risen 10%. However, for long-suffering shareholders, this is probably small comfort. Five years ago, in July 2020, the shares were changing hands for around 140p. But with the stock spending most of the past 12 months in the 60s and 70s, I wonder if this is the start of a recovery.

    Let’s take a look.

    Nothing to see here

    The first thing to note is that there’s no obvious explanation as to why the share price has picked up.

    Yes, the company did make a stock exchange announcement on 2 June confirming that the merger of its UK operations with Three completed on 31 May. However, this is old news. The deal was first announced in June 2023.

    As a result of the transaction, Vodafone expects adjusted EBITDAaL (earnings before interest, tax, depreciation and amortisation, after leases) to be €400m higher during the year ending 31 March 2026 (FY26). But adjusted free cash flow (FCF) will be €200m lower.

    Cost and capital expenditure synergies of £700m (€812m) are forecast by the fifth year after completion. And Vodafone expects the transaction to be “accretive” to its adjusted FCF from FY29 onwards. However, this feels like a long time to wait for the full benefit to be realised and, therefore, unlikely to explain the recent share price movement.

    Other factors

    Another explanation could be that, sometimes, a particular sector becomes ‘fashionable’ for investors. But the evidence on this is mixed.

    A look at the movement in stock market valuations over the past month (9 June to 8 July) of some of the largest telecoms companies in Europe doesn’t reveal any discernable trend.

    Stock Country 1-month share price movement (%)
    BT UK +11
    Vodafone UK +10
    Orange France +3
    AT&T US +2
    Swisscom Switzerland +1
    Verizon US -1
    T-Mobile US -1
    Telefonica Spain -4
    Deutsche Telekom Germany -7
    Data at close of business on 8 July

    Or it could be the case that investors now believe the group’s turnaround plan is working.

    The sale of some of its underperforming businesses, most notably in Spain and Italy, has enabled the group to reduce its borrowings. Vodafone’s debt has long been used as a possible explanation for investor apathy.

    Alternatively, the share price recovery could be evidence that the group’s newly-announced €2bn share buyback programme’s working.

    Final thoughts

    I suspect the truth is that it’s a combination of all these things and more besides. It’s impossible to know the reasons behind every trade.

    However, I think it’s fair to say that the group’s FY25 results and accompanying trading update probably helped. Vodafone’s businesses in Africa and Türkiye are performing well. And organic service revenue was 5.1% higher in FY25 than it was in FY24.

    Also, the annual dividend of 4.5 euro cents (3.88p) a share was confirmed. Although never guaranteed, this gives a current yield of 4.8%. The average for the FTSE 100 is 3.5%.

    But I still have some concerns. Its German subsidiary, which accounts for approximately 30% of revenue, continues to lose customers. As a result, the group decided to write down the value of the division by €4.35bn.

    And its return on capital employed fell 0.2 percentage points in FY25.

    However, I’ve long argued that Vodafone’s undervalued compared to some of its European peers. And on balance, I think there are enough positive signs for long-term value investors to consider adding the stock to their portfolios.



    Source link

    Share this:

    • Click to share on Facebook (Opens in new window) Facebook
    • Click to share on X (Opens in new window) X

    Like this:

    Like Loading...

    Related

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Telegram Email
    Previous ArticleDown 10% from May, is it time for me to buy more of this high-yielding FTSE heavyweight?
    Next Article Rutherford officials tout 3rd AAA bond rating after years of tax hikes
    user
    • Website

    Related Posts

    Dow, S&P 500, Nasdaq edge higher as Nvidia’s market cap hits $4T, Trump unveils more tariff letters

    July 9, 2025

    The more Apple stock falls, the more tempting it looks!

    July 9, 2025

    Is the Lloyds share price taking a breather before its next move up?

    July 9, 2025
    Add A Comment

    Leave a ReplyCancel reply

    © 2025 StockNews24. Designed by Sujon.

    Type above and press Enter to search. Press Esc to cancel.

    %d