Vodafone falls as Macquarie highlights cash flow, divi risks
Vodafone shares fell again on Wednesday as Macquarie warned the telecoms group is "structurally challenged" with long-term risks to cash flow forecasts.
FTSE 100
7,895.85
16:59 19/04/24
FTSE 350
4,341.08
17:09 19/04/24
FTSE All-Share
4,296.41
17:08 19/04/24
Mobile Telecommunications
1,784.13
16:59 24/01/22
Vodafone Group
67.00p
16:40 19/04/24
Once it has completed the acquisition from Liberty Global, the FTSE 100 group will have 31% of operating income before depreciation and amortisation in Germany, where Macquarie sees it being "particularly exposed".
The analysts see Vodafone as "structurally challenged in its battles with incumbents due to its lack of scale and significant capex burden", predicting particular operational pressures in Italy and Spain, with a slowdown in South Africa.
Spectrum auctions to come in Germany this quarter and UK in 2020, cash flow pressures "will mount".
Macquarie reiterated its prediction of a dividend cut to €0.08 and its 125p target price on Wednesday, the same as RBC downgraded to a day earlier.