Analysts at Citi have mixed, but ultimately positive feelings regarding Vodafone Group PLC (LSE:VOD) shares.
The US bank's analysts think the market is rightly concerned about execution and earnings risks at the FTSE 100-listed mobile telecom giant, particularly as competition remains fierce in a number of markets, while execution problems will take time to address in Germany.
In addition, the analysts said, a lack of trust in Vodafone’s medium-term FCF (free cashflow) outlook, particularly as its LTIP (long-term incentive program) was revised to account for energy headwinds, has added to the concerns, on top of pre-existing ones around how representative the company’s FCF definition itself has been in the first place.
However, the analysts added, though under pressure to execute on the many options it has in place to crystalise value and improve its balance sheet, market conditions may be favourable mid-term.
They said they have concluded that Vodafone is still healthy with limited funding needs and is competing against many companies that might find it difficult in the current macro backdrop