BofA Securities Downgrades Vodafone (VOD) to Neutral

BofA Securities analyst David Wright downgraded Vodafone (NASDAQ: VOD) from Buy to Neutral with a price target of $13.04 (from $10.92).

The analyst comments "The UK deal is conceptually good for Vodafone, but the upcoming impact on financials and valuation is increasingly heavy as numbers slip elsewhere, notably in Germany. Cash flow dilution is 35% for at least 2 years (cash yield dips to <5% vs. sector>7%), dividend cover is tight leaving little room for any further earnings slippage, and the risk is that German mobile becomes increasingly competitive. We think the mid-term recovery for Vodafone is attractive with dividend growth prospects from FY27 onwards. But while there is an element of being ‘paid to wait’ with 5% dividend and 6% buyback, the wait is now longer and the impact more material. Thus, we lower to Neutral."

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 $9.73 yesterday.

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