Nomura Securities Downgrades Vodafone (VOD) to Reduce; Sees Increased Competition
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Rating Summary:
18 Buy, 4 Hold, 1 Sell
Rating Trend: Up
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 11
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Nomura Securities downgraded Vodafone (NASDAQ: VOD) from Neutral to Reduce saying competition is set to increase, not decrease. The firm cut its price target from 190p to 180p.
Analyst James Britton commented, "Vodafone has outperformed the sector by 7% and the FTSE by 12% over three months and now trades at 7.0x forward EBITDA (incumbents 6.5x) compared with 5.1x at the start of 2013. The market has priced in substantial benefits from market repair, but we believe that competition may well increase, rather than decrease over the next 12 months:
- We expect new entrants in the UK, the Netherlands and India.
- Tougher competition is taking hold in South Africa and Turkey for the second successive quarter. Underlying growth rates are slipping.
- Drillisch’s LTE offers will act as a check on pricing in Germany and may yet accelerate the current trend for pricing cuts in Vodafone’s largest market. Yoigo will resume its discount position in Spain post consolidation of the convergent mobile virtual network operators (MVNOs).
- Lastly, European corporates are exploiting data as a means to reduce voice messaging spend.
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 $33.26 yesterday.
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