Broker snap: Vodafone's figures better than feared

24th Jul 2009 10:45

Friday's quarterly trading update from telecoms giant Vodafone has been well received by the market and contained nothing worrying enough to persuade Morgan Stanley to changes its favourable stance on the stock.The US bank has maintained its "overweight" recommendation for Vodafone, saying the "valuation thesis remains compelling.""Underlying prospective PE is 6x ex-all goodwill/licences - and even including some ongoing licence costs, we think it is unlikely the PE would rise significantly above 7x," Morgan Stanley said.Fellow US bank Citigroup said the results were "better than almost anyone expected."Organic group service revenue fell 2.1% versus a consensus prediction of a 2.2% decline, while Europe's revenue contracted by just 4.4% versus Citi's expectations of a 5.15 decline. Citi has reiterated its "buy" recommendation and 180p share price target.