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Vodafone (first-half earnings 14 November)
Good customer growth suggests that the market may be understating the potential of higher earnings. Earnings were up 17.00% in the last full year, with a steady expansion of market share suggesting more good times to come.
The current worry is that the dividend, currently 6.1%, is not fully covered by earnings. Further increase in 4G customer numbers would help improve cash flow. Vodafone is expected to report earnings per share (EPS) of 5p, up 62.00% year-on-year, but revenue is expected to fall 14.00% to £23 billion.
If the shares continue to turn lower, then they will have created a new lower high, maintaining the downtrend off the May 2015 highs. First 215p, and then the September low at 205p come into play. A move above the recent highs, around 223p, would suggest 230p, and then 235p are the next targets.
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