Vodafone's share price is in retreat after Credit Suisse cut the mobile operator's price and earning targets because of worries over a slowdown in the UK market.
According to the Guardian, Justin Funnell, an analyst with the banking firm, lowered Vodafone's target price down from £1.75 to £1.70 to reflect his view on Vodafone UK, although has retained his rating of outperform for the stock.
Funnell added in a research note carried by Reuters: "Given most of the big disposals are done and the US dividend is expected by most investors to repeat, material upside to Vodafone shares now relies on faster Vodafone growth, which has slowed from 2.5 per cent to 0.9 per cent in the last 12 months."
Credit Suisse also expressed concern that mobile termination rate cuts seemed likely in Italy and the UK, and that depressed economies in Southern Europe would continue to drag down overall performance of the company. The Swiss-based banking giant also believes that the tiering of data pricing remains unsuccessful and has prompted Vodafone to review its data pricing strategy.
Separately, industry analysts are beginning to question the likelihood of Vodafone making a bid for Cable & Wireless Worldwide (CWW), believing the deal holds many risks for the mobile operator.
The financial service firm Espirito Santo told This is London that they now think there's less than a 20 per cent chance of the deal going ahead. The firm has calculated the worth of CWW--using best and worst case scenarios--at over £1.8 billion, or 68.12p a share, well in excess of its current level on the UK stock exchange.
For more:
- see this Guardian article
- see this Reuters article
- see this This is London article
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