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Vodafone Reports Solid Q3 Growth

Vodafone (LON: VOD), a British telecommunications group headquartered in Newbury, Berkshire, announced on Wednesday a continued rebound in sales in the third quarter.

Revenue for Q3 2022 came in at €11.68 billion, a growth of 4.3% from Q3 2021, of which 3.7% is organic.

Vodafone’s service revenues in Europe and Africa grew by 3.1% over the period. However, organic service revenue fell 1.6% in Spain and 1.3% in Italy.

The British telecommunications group also reaffirmed its targets for the financial year of an adjusted EBITDAaL between €15.2 – €15.4 billion and adjusted free cash flow of at least €5.3 billion.

Management Commentary

Vodafone Chief Executive Nick Read said, “Our team has delivered another solid quarter, demonstrating the sustainability of our growth strategy and medium-term ambition. This performance keeps us firmly on track to deliver FY22 results in line with the higher guidance we set out in November. We remain focused on our operational priorities to strengthen commercial momentum in Germany, accelerate our transformation in Spain, and position Vodafone Business to maximize EU recovery funding opportunities. We are also committed to creating value for our shareholders through proactive portfolio actions and continuing to improve returns at pace.”

Wall Street’s Take

Following Vodafone’s Q3 update, Bernstein analyst Stan Noel kept a Buy rating on VOD and 155p price target. This implies 18% upside potential.

Overall, VOD scores a Strong Buy consensus rating based on eleven Buys.

The average Vodafone price target of 169.73p implies 29.3% upside potential from current levels.

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