Vodafone upgraded to 'neutral' by Bank of America ML, says valuation in line with peers

8th Jun 2015 11:57

Bank of America Merrill Lynch (BoA) upgraded Vodafone to 'neutral' from 'underperform' and raised the price target to 252p from 223p, saying the stock's valuation, which is in line with peers, supports a more neutral stance.BoA said downside risks include a slower than expected recovery following disappointing full-year numbers.It said that FY results confirmed a fragile recovery, with market underperformance in Germany and expectations of a slower recovery across the group until the second half.It wasn't all disappointing, though, with Italy and Africa improving and key performance indicators encouraging, said BoA.However, "midterm, without mergers and acquisitions, we think capex guidance is unsustainable and that consensus expectations of dividend growth could be disappointed," said Bank of America.