Vodafone Share Price Forecast - Buy, Sell or Hold?
Vodafone Group PLC (LSE:VOD) is a British multinational telecommunications company with operations in Europe, Africa, Asia and Oceania. Learn more about the Vodafone share price, including what the analysts are forecasting for the stock over the next few years and why Vodafone has one of the highest UK dividend yields right now at 10.80%.
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Vodafone Share Price Forecast in 12 Months
Are Vodafone shares a good buy? According to the 11 analysts polled by TipRanks for a 12-month forecast for Vodafone's share price, there are currently 6 buy ratings, 5 hold and zero sell ratings for Vodafone shares. Analysts at Goldman Sachs have one of the highest price targets on the stock of GBX 110.00p, while analysts at Jefferies have one of the lowest price targets on the stock at GBX 85.00p - both issued in 2023.
Even though there are more buy ratings for the Vodafone Group PLC share price forecast, it does not mean the share price will go up immediately. However, at the time of writing Vodafone’s share price was trading around GBX 72.00, meaning there is potential growth to the average and highest price target.
Currently, the stock is even trading around the lowest price target. With some analysts bullish in the long-term it could represent an interesting scenario for value investors. Further below, we dig into what is influencing Vodafone's share price and what could lie ahead in the future.
While global stock markets crashed during the pandemic, Vodafone’s share price had been struggling since 2018. In fact, from the high of 2018 to the pandemic low in March 2020, the stock has fallen around 60%. After a brief rally higher, the share price has continued to struggle lower and is trading below its pre-pandemic price level.
Why are Vodafone shares going down? During this period of time, Vodafone had been struggling with a decline in global sales and a high level of debt. The pandemic also took its toll on Vodafone’s share price as there was a huge decline in roaming revenue.
However, the Vodafone share price forecast 2021 experienced some positive elements. The company sold off some of its European mobile tower's business with the rest due to be spun off into a separate company that will be listed on the Frankfurt Stock Exchange.
The high debt load comes from Vodafone’s $21.3 billion acquisition of Liberty Global’s cable systems in the Czech Republic, Germany, Hungary and Romania. The aim is for Vodafone to be Europe’s leading converged operator with 116.3 million mobile customers, 24.2 million broadband customers and 22.1 million TV customers across 13 European countries.
In June 2023, Vodafone announced a deal to merge their UK-based operations with Three to create the UK's largest mobile phone operator. While the deal is yet to be approved by the Competition and Markets Authority (CMA) it could take their combined market share past BT Group's EE and Virgin Media's O2 networks.
Vodafone is expected to hold a 51% stake in the merger and there are plans to invest £11 billion in the 5G network over the next 10 years. This could make a Vodafone share price forecast 2025 very interesting if the deal goes through.
Vodafone Share Price Buy or Sell Research
Analysts tend to focus on either fundamental or technical research while some will analyse both.
The Fundamental Picture
News of Vodafone's potential merger with Three in June 2023 could prove to be a huge book for the telecommunications operator, ensuring a larger slice of the UK mobile phone network. However, it does not disguise some of the other factors affecting the company. In 2023, Vodafone reported revenue that was only 0.2% higher than its revenue for 2022. Debt was five times higher than its pre-tax profit level with changes in management not yet yielding results.
There are some recent changes that have taken place that are worthwhile watching. Vodafone's largest shareholder - e& - now has a seat on the board. The company based in the United Arab Emirates has done well in growing companies in the Middle East and Africa so could provide an interesting dimension for Vodafone.
Another reason Vodafone garners so much attention is the fact it tends to be on most people's list for UK dividend stocks for income to watch. The company has a strong record of paying out dividends and because its share price has been falling, the current dividend yield is 10.80% meaning you will be paid this amount for just holding its shares.
The Techincal Picture
The long-term Vodafone price chart shown above from 1990 to June 2023, highlights the recent share price decline. Price is approaching near record lows which may attract some value investors who are also interested in the higher dividend yield as the share price falls. Identifying your investment objectives is important to prioritise growth or income (in the form of dividend payments).
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FAQs on Vodafone Share Price
Why is Vodafone share price so low?
Vodafone's share price has struggled in recent years due to the high debt load which is now five times its pre-tax profits and stagnating sales and revenue. However, new board members and a potential partnership with UK mobile network operator Three could help to turn the company around if it gets approved by regulators.
Where is Vodafone share price heading?
Of 11 analysts polled the highest price target for Vodafone's share price over the next 12 months is GBX 185.00p with the lowest price target at GBX 75.00p.
Is Vodafone a buy, sell or hold?
Currently, of 11 investment banking analysts polled 6 have buy ratings on the stock, 5 have a hold rating on the stock with 0 sell ratings.
How often do Vodafone pay dividends?
Vodafone pays a diviedn twice a year in February and August. Currently, Vodafone's dividend yield is 10.80%.
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