Vodafone share price is up by 0.80% in part because of the overall rally of London stocks where the FTSE 100 and FTSE 250 are up by 0.83% and 0.65%, respectively. This trend is partly because of the new vaccine and the optimism of a Brexit deal.
Vodafone share price dropped to a low of 93p in March and then bounced back by 53% by June. It then fell by 30% between June and October. From October, VOD shares have risen by more than 30%.
The recent upward trend has been because of the recent upbeat earnings. In the first-half of the year, the company generated an adjusted EBITDA of more than €7 billion while its profit before tax fell to €2 billion.
Its revenue declined by 2% to €21.4 billion, which was better than estimates. The firm also provided a better forward guidance. It expects to make between €14.4 billion and €14.6 billion in the next 12 months.
A Covid-19 vaccine is very important for Vodafone share price. That’s because it will lead to more global travel, which will boost its lucrative roaming business.
However, the firm faces a major challenge with its debt. The firm has more than €61.6 billion in total debt, which is substantial for a company with a market cap of more than £35.42 billion. It also has a net debt of about €15.8 billion in cash, leading to a net debt of €45.8 billion.
Analysts believe that Vodafone share price is relatively cheap. According to Marketbeat, they have an average consensus target of 178.80p, which is about 35% from the current price. The most optimistic analysts are from UBS, who expect the shares to rise to 192p. Those from Goldman Sachs, Credit Suisse, and Jefferies are also bullish on Vodafone.
On the daily chart, we see that the Vodafone share price has been on an upward trend. It is trading at 131.50, which is 30% above October low. The price is above the short-term and longer-term moving averages. The RSI has also moved to the overbought level. Therefore, the shares will possibly continue rising as bulls aim for the next resistance level at 142p.
