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(Sharecast News) - Citi has maintained a 'neutral' stance on Vodafone ahead of the telecoms group's first-quarter results in two weeks, saying that the top-line moderation in two key markets could keep a lid on growth.
The bank reiterated its 70p target price for the shares ahead of results on 25 July, in which it expects to see just 1.5% service revenue growth, down from 3% in the fourth quarter.
After exiting two of its most challenging markets (Italy, Spain), Vodafone's equity story has materially simplified," said analyst Siyi He.
"Having said that, however, continuation of FY24 growth trends in two of its key remaining markets could be challenging as Vodafone weather through the cable TV un-bundling in Germany and see lower pricing support in the UK."
He acknowledges that the stock is "cheap with appealing yield and technical support from buybacks".
However, online pressure from German cable un-bundling is likely to dominate momentum and limit share-price upside in the near term, until around the third quarter.
Shares were up 0.4% at 71.47p by 0946 BST.
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