Goldman Sachs Upgrades Vodafone (VOD) to Conviction Buy; Verizon Wireless/EM Growth Offsets Rough Patch in Europe

Goldman Sachs upgraded Vodafone (NASDAQ: VOD) to Conviction Buy with a price target of $36.90.

Goldman analyst, said, "Vodafone has underperformed the sector y-t-d as macro and competitive pressures have weighed on European revenues and on sentiment. Given our above consensus view on growth at Verizon Wireless (VZW) (NYSE: VZ) and in emerging markets, we believe that consensus downgrades are coming to an end. Higher than expected VZW dividends should help refocus attention on Vodafone’s strong proportionate growth (+3% 2012E-15E EBITDA CAGR vs. the incumbent average of 0%). With the stock implying negative long-term growth and trading at a discount to peers, we see substantial rerating potential."

"We forecast solid fiscal 2012 results on May 22. We expect management to reiterate long-term guidance for 1%-4% revenue growth and ‘stabilizing’ EBITDA margins..." (FY13/14 EPS estimate cut from $16.59/18.07 to $16.17/17.00)

For an analyst ratings summary and ratings history on Vodafone click here. For more ratings news on Vodafone click here.

Shares of Vodafone closed at $26.65 yesterday.

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