The influential Swiss house reckons Germany is back on the growth trail after 13 successive quarters of stuck in reverse gear.
As the country accounts for just under a quarter of group operating profits this augers well for Vod’s financial performance.
“We re-iterate our view that recovery and operational gearing at Vodafone has been underestimated and that growing mobile data usage should help drive more for more price increases across Europe,” said UBS in a note to clients.
Merger on the cards?
It also sees what it calls ‘M&A optionality’, which simply means it considers a merger with Liberty Global of the US is a possibility.
For income seekers Vodafone sits on a very healthy yield of 5.5%, UBS pointed. The shares, currently marking time at around 220p each, are worth 310p each, it added.
Elsewhere in Brokerland there were a lot of recommendations, but few real material changes.
Goldman Sachs went to ‘neutral’ from ‘sell’ on support services specialist Capita PLC (LON:CPI), while RBC Capital Markets moved from ‘underperform’ to ‘sector perform’ on the fashionistas at Burberry (LON:BRBY).
Oiler has monster potential
Turning to the small-caps, San Leon Energy (LON:SLE) was given a boost by SP Angel, the resources boutique.
It reckons the acquisition of the OML 18 oil field in Nigeria’s Niger Delta is a game changer.
“[The] valuation contribution not only dwarfs the rest of its portfolio, but also provides it with near term opportunities for growth, in both production and reserves,” the broker said in a note initiating coverage of the oiler.
“Furthermore, the asset provides the company with access to further opportunities in country and regionally.”
It rates the shares, currently changing hands for 45p each, at £1 a pop.
That values the business at over £500mln.
Mining for value
It calls an updated technical report “strongly positive”, while its 160p price target suggests investors are missing a trick given the stock is currently bumping around at 85p.