Vodafone Equity Valuation
2010
VODAFONE. (VOD.L, VOD LN) SECTOR: Telecommunications Services INDUSTRY: Wireless Telecommunications Services ANALYST: Myles Carey CID: 00619732
[EQITY RESEARCH REPORT: VODAFONE. (VOD.L, VOD LN)]
Includes Investment highlights, analyst opinion and investment recommendation supported by strategic analysis of VOD.L and the Telecommunications sector and a comprehensive valuation based on DCF, multiple and DDM analysis.
September 6, 2010
[EQITY RESEARCH REPORT: VODAFONE. (VOD.L, VOD LN)]
Equity Research Report NAME: Myles Carey CID: 00619732
TABLE OF CONTENTS
Page 3: Investment Summary Pages 3-4: Investment Highlights Page 5: Business Summary Page 6: SWOT Analysis Page 7: Telecoms Industry - Overview Page 8: Telecoms Industry – Trend and Regulation Page 9: Competitive position Page 10: Performance Page 11: Valuation – Sum-of-parts Page 12: Valuation – DDM and Risks
September 6, 2010
[EQITY RESEARCH REPORT: VODAFONE. (VOD.L, VOD LN)]
Investment Summary: We believe Vodafone to be slightly undervalued due to the intrinsic value within its portfolio that is not recognised in the share price. It is a well known phenomenon/anomaly that the equity-market is valuing Vodafone at a discount to fundamental value. Certain assets controlled by the group are failing to adequately contribute to Vodafone’s share price. Analysts disagree to the extent with which the market is discounting the price from its sum-ofparts. We take the view that the disposal value of the group is 188.2p – giving a potential 38% upside on our recommendation. This valuation is based on the premise that management adhere to the outlined strategy to realise this value through divestures and disposals of select underperforming assets such as Verizon Wireless (VZW) and SFR. Patience may be required for the group to realise value in this manner, however the stock is still supported by a 6.81% Dividend yield (8.31p) with an annual targeted growth of 7%. Our view is further
VODAFONE. (VOD.L, VOD LN) SECTOR: Telecommunications Services INDUSTRY: Wireless Telecommunications Services ANALYST: Myles Carey CID: 00619732
[EQITY RESEARCH REPORT: VODAFONE. (VOD.L, VOD LN)]
Includes Investment highlights, analyst opinion and investment recommendation supported by strategic analysis of VOD.L and the Telecommunications sector and a comprehensive valuation based on DCF, multiple and DDM analysis.
September 6, 2010
[EQITY RESEARCH REPORT: VODAFONE. (VOD.L, VOD LN)]
Equity Research Report NAME: Myles Carey CID: 00619732
TABLE OF CONTENTS
Page 3: Investment Summary Pages 3-4: Investment Highlights Page 5: Business Summary Page 6: SWOT Analysis Page 7: Telecoms Industry - Overview Page 8: Telecoms Industry – Trend and Regulation Page 9: Competitive position Page 10: Performance Page 11: Valuation – Sum-of-parts Page 12: Valuation – DDM and Risks
September 6, 2010
[EQITY RESEARCH REPORT: VODAFONE. (VOD.L, VOD LN)]
Investment Summary: We believe Vodafone to be slightly undervalued due to the intrinsic value within its portfolio that is not recognised in the share price. It is a well known phenomenon/anomaly that the equity-market is valuing Vodafone at a discount to fundamental value. Certain assets controlled by the group are failing to adequately contribute to Vodafone’s share price. Analysts disagree to the extent with which the market is discounting the price from its sum-ofparts. We take the view that the disposal value of the group is 188.2p – giving a potential 38% upside on our recommendation. This valuation is based on the premise that management adhere to the outlined strategy to realise this value through divestures and disposals of select underperforming assets such as Verizon Wireless (VZW) and SFR. Patience may be required for the group to realise value in this manner, however the stock is still supported by a 6.81% Dividend yield (8.31p) with an annual targeted growth of 7%. Our view is further