BUY VODAFONE

Trading on a sector multiple for above sector average growth following 4 consecutive quarters of improvement. Importantly the under-performance in Germany vs DT has now been eliminated, a key source of uncertainty over recent quarters.

The mid term targets put it somewhere somewhere between 5 and 10% EBITDA growth with a fully covered dividend or management don’t get paid. That is very solid EBITDA growth and comparable to LBTYA which trades 2 turns more expensive.

Perhaps this negates the valuation discrepancies the two sides had and brings them back to the table? Upside M&A optionality.

Over a 5% div yield is good in both a sector and a market context. With uncertainty removed we should see the stock rerate onto a sector yield which should see it through £2.50.

BUY.