Deutsche Bank repeated a 'buy' on telecoms giant Vodafone plc (LON:VOD), saying its profits and growth in Europe continue to improve.
Organic service revenue growth continues to improve at the group level in Europe despite some weakness in Africa, Middle East and Asia Pacific and a full quarter drag of EC (European commission) roaming charge regulations.
Underlying data price trends continue to improve in Europe, while a recovering handset cycle may assist growth in the scond half, says the broker.
Earlier this month, first-half results from the world’s second-largest mobile operator beat City hopes.
Italy and Germany were at the vanguard as the mobile titan weighed in with earnings before interest tax and depreciation of €7.9bn, up 4% on a year ago and €100mln ahead of analysts’ consensus forecasts.
Deutsche analyst Robert Grindle noted that as European mobile returns to growth, he expected a kicker to operating leverage with upside risk to profits in Europe even if trading in Asia and the Middle, East and beyond gets tougher.
Deutsche cuts the target price on VOD 15p to 295p due to foreign exchange.