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Vodafone Group Public Limited Company Message Board

  • llibenak llibenak Sep 11, 2013 8:49 AM Flag

    Fair Value

    What do you consider the fair value of VOD under two scenarios? The first is improve their existing holdings and the second is to sell out to T. Thanks for your thoughts.

    Sentiment: Buy

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    • nigeco@mail.com nigeco Sep 12, 2013 3:38 AM Flag

      part of an article from yahoo
      Action to take -- Vodafone currently trades near $33. The stock has climbed over 30% this year, excluding dividends. While that feels stretched out, based on the dynamics of the stock, there's still value at this level. The forward price-to-earnings ratio is a moderate 11.4. Based on the Verizon sale windfall contributing to earnings, the company's strong financial position, and its emerging-market growth strategy, a 12-month price target of $42 sounds about right. Factoring in the 4.7% dividend yield, that would be a total return of nearly 33%.

    • If T was smart they would buy out VOD as soon as VZ deal is finalized. Then T could do what they want with VOD and its cash.

      • 1 Reply to romannorga
      • "If T was smart they would buy out VOD as soon as VZ deal is finalized."

        Or T could be even smarter and agree to buy VOD before the VZW deal closes, right Smalls?

        While many factors could affect T's timing, at this point I don't think the VZW deal is one of them. T could make a bid now or negotiate a deal now and close it after the VZW deal closes. Who knows how much higher interest rates will be if they wait. Who knows what other deals VOD may try to do that T would not find attractive. Now that VZ has successfully tapped the debt markets, T should take advantage of strong demand and secure cheap financing now.

        Smalls, your nag better start making its move soon or it will not be there at the wire!

    • BEFORE the VZ shares and cash dividend are paid out? $42 price target without T takeover, near $50 with a takeover. That is a fair value which differs from Price Target expectations as VOD has seemed to trade at a discount to fair value for a long stretch.

      Post dividend would be $25/$33 without deal/with T deal. Do I think either price will hit without the takeover? Not likely. If T doesn't come to the table then upper $30s at best before dividend, then $20 spot at best post dividend. End assumption: VOD is trading about $5-6 dollars below where it should be at the moment even if T never steps up to the plate.

      Sentiment: Strong Buy

 
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