Could Vodafone share price rise after Q3 trading update?

Vodafone trades -17% over the past 12 months under performing the broader market ahead of the Q3 trading update due Wednesday 3rd February. After better than forecast H1 results is Vodafone on a roll?

Charts (3)

When?

Wednesday 3rd February

What to expect ?

Vodafone is due to update the market with Q3 earnings. The share price trades down 17% over the past 12 months under performing the broader market.

Results so far across the pandemic have been mixed. Whilst roaming charges have fallen owing to travel restrictions, demand for data usage remains elevated thanks mainly to strong demand in emerging markets. 

H1 results back in November revealed organic revenue declined 0.4%, ahead of the -2.3% forecast. Pre-tax profits came in at €2 billion a vast improvement on the previous year after it wrote down the value of its Indian business. The better than forecast earnings saw management lift full year guidance.

Traders are hoping to see further improvements to top line growth and guidance to remain at EBITA of €14.4- €14.6 billion. Services revenue which had declined sharply in the first two quarters is expected to stabilize -0.14% in Q3. Cash flow will also be in focus and investment in 5G services.

Any update concerning the ongoing tax rebate legal challenge by India for $2 billion will be eyed. Whilst an independent tribunal in Netherlands ruled in favour of Vodafone an Indian official has said that India will challenge the ruling.

Vodafone technical analysis

After rallying from early November, the Vodafone share price has been consolidating across the start of this year forming a triangle consolidation pattern. The price is sitting on the 50 sma at 126.6 and the RSI is also neutral bang on 50.

Q4 results could be the catalyst that causes a breakout for the stock price. Stronger than forecast results could see the share price breakout to the upside and continue its upward trend towards 132.50 horizontal support (yearly high) and on to 136 (high 11th December).

On the flip side, weak results could see the price break out to the downside heading towards 119/8 December low & 100 sma. 

Learn more about trading equities



More from Equities

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.