Vodafone Group PLC (LON:VOD) is expected to highlight strong earnings and free cash flow growth when it releases full year results next month, that’s according to Morgan Stanley.
The US bank repeated an ‘overweight’ rating for the mobile telecoms firm whilst telling investors that the recent market concerns are “overdone”.
READ: Vodafone deal to buy Liberty Global assets would increase free cash flows
Analyst Emmet Kelly noted that the recent share price tail-off was driven by the consensus miss for the third quarter, concerns over trends in the Indian business, a lack of visibility on a possible deal with Liberty Global and a higher outlay on network spectrum over the coming 24 months.
Kelly downgraded Morgan Stanley’s price target to 270p, from 280p, which still suggests significant upside to the current price of 204.75p.
The analyst said Vodafone is likely to beat guidance for the last financial year, and also highlights that ongoing telecoms consolidation and potential monetisation of mobile towers as other possible catalysts for the share.