Vodafone Forecast For Next Year

last updated on

Vodafone Forecast For Next Year

Vodafone (Vod) Forecast For Next 12 Months

quick look at the performance of Vodafone (VOD) shows it's a rollercoaster ride full of misery. During the dot-com era, Vodafone (VOD) had reached a high of 500p but was trading around 63p in 2023.

Now, many are wondering how this telecom giant has even managed to stay a part of the FTSE 100 with a performance like this.

Vodafone Keeps Paying Dividends

To put it short, Vodafone (VOD) is overcooked, and the firm has done brilliantly by just staying afloat. What's more interesting is that Vodafone (VOD) has also paid billions in dividend payments over the years.

One reason why the dividend yield of Vodafone (VOD) was so high was that the share price kept collapsing lower and lower.

Results for the whole year, which were released on May 20, suggested that the company was getting established. Service revenue increased 5.1%, while sales increased 2% to 37.4 billion. With increases of 11.3% and 83.4%, respectively, Africa and Turkey were the main drivers.

Despite the group's 400 million operational deficit due to a 4.5 billion impairment charge, the board approved a further 2 billion share buyback.

Now, the group appears to be targeting markets with high growth. That's how they have managed to produce over 66% of their adjusted free cash flow. So, in a sense, we can say that Vodafone as a company has changed.

But despite all the changes, the debt of Vodafone remains heavy and was near 31.8 billion during September. Even that, they managed to achieve that number by selling their assets.

Looking ahead, the capital expenditure of Vodafone is expected to remain high. Three UK and Vodafone UK announced that they would invest 1.3 billion in the first year of their merger, which is now known as VodafoneThree.

Within five years, the partnership should result in 700 million in annual cost and capital expenditure savings, but that's a long time to wait.

So, based on all these things, a group of analysts has set 84.5p as the price target for the Vodafone stock price. This amounts to a gain of around 5% and isn't that impressive, given all the risks one would take to invest in Vodafone.

Trending Stories