UBS reckons Vodafone Group PLC's (LSE:VOD) recent rally may have run too far, warning that the telecoms group could fade after fourth-quarter results, despite the broker raising its price target.
The Swiss bank lifted its 12-month target to 95p from 84p but kept a 'sell' rating on the shares, which closed at 115p on 29 April. That points to around 17% downside before dividends, with UBS forecasting a total stock return of minus 13.5%.
Vodafone shares have had a strong run, rising 17% so far this year and 60% over 12 months, helped by sector rotation into hard assets, geopolitical defensiveness, falling capex expectations, consolidation hopes and company-specific support from buybacks.
But UBS said the latest leg higher appears to reflect expectations of another buyback of up to €2bn for FY27, and that may now be in the price.
“We think another buyback is priced in and we see a risk the shares de-rate post Q4 results on 12 May,” the broker said.