​​Vodafone on track to hit guidance

​​​Vodafone on track to report better numbers

​Vodafone, the telecommunications giant, is expected to announce its financial results for the year with revenue of €21.53 billion and €3.83 billion in pre-tax profit. These figures are in line with the full-year guidance that was announced at the end of 2022, indicating that the company is on track to meet its targets.

​However, it is worth noting that consensus for earnings per share (EPS) on a full-year basis has been trending downward over the past year. This suggests that analysts have become more cautious about the company's future earnings potential. Despite this, Vodafone has a track record of surpassing consensus estimates. In the past two years, they have beaten EPS expectations five out of eight times and revenue expectations six out of eight times.

​Vodafone has faced challenges over the past year, with stagnant to declining revenue and a slower turnaround than anticipated. As a result, the company's stock price has been negatively affected, experiencing a decline of over 20%. Some investors are concerned that the stagnant revenue may eventually impact cash flow and potentially reduce the dividend.

​Nevertheless, Vodafone has shown early signs of success through its focus on cost efficiency and growth in service revenue. Sustaining this momentum and effectively executing its turnaround strategy will be crucial for the company's future performance.

​Vodafone analyst ratings, price targets and sentiment

​Refinitiv data shows a consensus analyst rating of ‘hold’ for Vodafone. Analysts show 2 strong buy, 5 buy, 8 hold, 2 sell and 1 strong sell - with the mean of estimates suggesting a long-term price target of 99.12 pence for the share, roughly 28% higher than the current price (as of 13 November 2023).

​IG sentiment data shows that 98% of clients with open positions on the share (as of 13 November 2023) expect the price to rise over the near term, while only 2% of clients expect the price to fall. Trading activity over this week shows 70% of sells and this month 56% of sells.

​Vodafone technical analysis

​The Vodafone’s share price potentially bottomed out in September when the first weekly chart close above its July peak at 78.33 pence was seen. It showed the possibility that the share might be in the process of forming a medium- and perhaps even long-term bottom which could take it back to its February high at 103.24p.

​Vodafone Weekly Candlestick Chart

​For a medium-or long-term bullish reversal to become likely, the 200-day simple moving average (SMA) and September peak at 82.14p to 82.56p and the December 2022 low at 83.24p would need to be exceeded. If so, the 55-week SMA at 84.30p and the April low at 87.20p could be reached in the first instance.

​Potential slips should find support around the October lows at 73.85p to 73.62p. While this area underpins, further sideways trading with a short-term bullish bias should remain in play.

​Vodafone Daily Candlestick Chart

​For a break higher to ensue, the mid-October-to-November highs at 79.00p to 79.27p would need to be exceeded on a daily chart closing basis.

​More significant support comes in between the June-to-August lows at 69.90p to 69.73p.

​While the July trough at 69.73p underpins, a medium-term bottom remains in play with a bullish medium-to long-term reversal expected to ensue.