UBS analysts have slashed Vodafone Group PLC (LSE:VOD)’s targets after second-quarter figures “validated” concerns.
Citing weaker trends in Germany, UBS cut Vodafone’s share price target from 77p to 70p and doubled down on a recently set ‘neutral’ rating in a note on Monday.
Vodafone earlier this month reported a 6.2% decrease in German service revenue for the second quarter, against the first’s 1.5% drop.
UBS said weakness in the country was likely to continue, prompting a 5.4% and 3.4% drop in local service revenue through the third and fourth quarters respectively.
The bank’s forecast for peak German service revenue growth by the final quarter of 2026 was also cut from 4.9% to 2.9% as a result.
“There is upside from UK [merger and acquisitions],” UBS said, citing its planned tie-up with Three, alongside likely support from buybacks.
However, “Vodafone may not re-rate until there is evidence that Germany is turning around", UBS added.
Shares were up 0.3% at 70.3p on Monday.