Vodafone is a long-standing favourite of Frederick & Oliver and offers a great buying opportunity.
Vodafone is at forefront of innovative technology. According to a Grand View Research Inc. study, the global market for 5G services is expected to reach $665bn. This compound annual growth rate will be 46.2% between 2021 and 2028.
Grand View Research has named Vodafone one of the 14 “key players” in the global 5G service market. Vodafone already capitalized on the potential of this technology by listing its 5G towers, which generated EUR2.3bn.
It is important to note the date 2028. General Motors, Daimler, BMW and Daimler have all announced that they will only sell electric-powered vehicles at this point. As autonomous driving becomes a norm, these vehicles will be able to communicate with each other and infrastructure.
Vodafone will reap the benefits of international travel being resumed. While data roaming fees were banned in the EU in 2017, higher charges are charged when you use your phone abroad. This income stream has been halted in 2020.
The company has 84.9 million African data users. This is an increase of EUR12.16 billion from the previous year.
This stock is also a strong portfolio member. The shares traded at 140p at the beginning of 2019 and at 140p last month (2.5 year later).
While the capital appreciation is lacking, 3 years with a 6% dividend, and no sleepless nights are not to be missed.
Vodafone’s current price of 122p could be ripe for a takeover.
AT&T approached Vodafone in 2014 with a deal of PS70bn, but it was blocked by the CMA.
Vodafone shares could be worth 250p if such a deal were to happen today given its market capitalisation of PS34bn.
Analysts at Goldman Sachs had rated the stock as a buy last week with a 180p price target. We are inclined to agree.
Reassessment level – 100p This psychological price point could be seriously damaged.
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