Image source: Vodafone Group plc
The Vodafone (LSE:VOD) share price has seemingly stagnated in 2024. Despite encouraging progress being made to turn the telecom business around, the group’s latest interim results failed to impress. Consequently, the shares gave back the little gains they had made during the year.
But is there hope for shareholders? Let’s take a look at the latest results and explore what analysts now predict for the Vodafone share price moving forward.
Investors are still unconvinced
Vodafone’s been delivering lacklustre performance for over six years now. And the latest attempt to right the ship comes in the form of new CEO Margherita Della Valle.
To her credit, she certainly seems to be making far better progress than her predecessor, refocusing operations and using disposal proceeds to pay down debt. And looking at the latest results, there are some positives. Top-line sales between March and September were actually up by a modest 1.6%, driven by a 1.7% increase in service revenue. And when paired with lower costs, underlying earnings grew at a slightly faster 3.8% pace.
Plus, with what appears to look like a potential greenlight from the Competition and Markets Authority, Vodafone’s merger with Three seems on track to be completed in early 2025. And that could definitely help bolster performance in the UK market.
Unfortunately, it’s the performance in Germany that analysts are most worried about. With over a third of sales originating from this core market, management’s promised to get its German operations back on track. Yet, once again, the latest results continue to show customer attrition and market share losses.
As such, opinions from analysts, while not dire, aren’t exactly positive either.
| Opinion | Analysts |
| Buy | 3 |
| Outperform | 3 |
| Hold | 10 |
| Sell | 1 |
| Strong Sell | 1 |
Vodafone share price forecast
With mixed views on Vodafone’s business, the share price forecasts are equally mixed. However, the average consensus among institutional analysts indicates that the stock will rise to around 82.8p by this time next year. Compared to the current share price, that suggests a potential upside of 20%.
Analyst forecasts should always be taken with a pinch of salt since investors don’t know what assumptions have been baked into them. But it’s also worth pointing out that the continuous stream of disappointments over the years has set the bar pretty low.
However, short of seeing German performance bounce back, I’m sceptical that the Vodafone share price will be able to maintain upward momentum. Therefore, it’s something shareholders likely need to pay close attention to.
Management’s brought in new leadership for its German operations as well as cut the headcount by 3,100 to bring down costs. It’s also started deploying artificial intelligence (AI) to improve customer experiences that’ll hopefully start creating some goodwill to improve pricing power and loyalty. But until these actions start translating into actual value creation, this isn’t a business I’m rushing to buy, even at its currently depressed valuation.
