Vodafone shares stabilising but can drone technology lift fortunes?
The Vodafone share price is enjoying a period of stability following fresh funding from the British government. However, with shares down 18% year-on-year, the telecommunication company’s fortunes are by no means secure.
- Vodafone (VOD.L) share price drops 18% year-on-year
- The company's shares are beginning to see a gradual rise
- Will a £30 million research grant to develop drone technology aid recovery?
- German moves helping but can Vodafone find long-term growth?
- Want to trade Vodafone shares? Open an account today
Vodafone shares opened at 127p on 20 January. A sharp drop to 126.58p took it below the previous day’s close before a gradual uptick in the early hours of the trading day. That pattern mirrors what investors have experienced for the last 12 months.
Are drones turning bears into bulls?
The Vodafone share price has dropped by 40% over the last five years, however, diversification within the company may be turning bears into bulls. The British government recently awarded Vodafone a £30 million grant to develop its drone technology. The funding comes from the Future Flight Challenge project, which involves 16 high-profile companies, including BAE Systems, Network Rail, and Skanska.
A statement from Vodafone confirmed that the £30 million will help to 'develop a system that will enable remote inspection and monitoring of industrial sites'. The company’s radio positioning service will be integrated into a command centre that will power a new fleet of autonomous drones. This project brings a new dimension to Vodafone and could open the door to more integrated innovations in the future.
Vodafone shares attract new attention
In the last 12 months, the Vodafone share price has fallen from 155p to, at one point, below 98p per share. However, despite the recent woes, analysts see hope on the horizon. Berenberg Bank recently upgraded its Vodafone share price rating from hold to buy. It also adjusted its price target from 148p to 155p.
Fuelling the shift in sentiment is Vodafone’s growing presence in Germany. Telefónica Deutschland recently inked a deal with Vodafone to help light up Germany’s 4G blackspots. The deal means the telecoms company will provide 4G services in underserved areas. Moreover, it builds on the recently completed purchase of Anglo-Dutch-American telecommunications company Liberty Global.
Will existing debt prevent Vodafone share price recovery?
For all the positives, Vodafone still has debts totalling £40 billion. This continues to hang over the company and, in turn, its value. Vodafone shares have enjoyed a positive start to 2021 and there is scope for growth. Analysts are tentatively becoming more bullish, but questions remain over the company’s ability to regain its market position. For now, there appears to be some relative stability. However, the real question is: can the Vodafone share price get back to where it was last year and, in the future, surpass the latest 155p target?
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