Deutsche Bank Upgrades Vodafone to "Buy" on Possible Verizon Wireless Deal (VOD)

Deutsche Bank Upgrades Vodafone to “Buy” on Possible Verizon Wireless Deal (VOD)


Deutsche Bank analysts believe that a deal with Verizon (VZ), or another company, for Vodafone Group’s (VOD) stake in Verizon Wireless is increasingly likely. As such, the analysts upgraded the British telecom company on Friday.

The analysts upgraded VOD from “Hold” to “Buy.” Duetsche Bank analyst David Wright said, “We believe that recent developments increase the likelihood of a Verizon Wireless deal in the near term. Whether VOD sells its stake, or Verizon instigates a Group based merger/acquisition, we think a deal could crystalise value that is not currently reflected in Vodafone’s.”

“We think a KDG deal, consistent with our convergent thesis, is likely the tipping point for a VZW deal. Leverage is now high, and VOD needs to preserve liquidity for its European turnaround. Furthermore there is value maximisation to consider with US competition getting tougher. With a deal looking more probable and consensus having rebased after a tough H2,” Wright added.

Vodafone shares were up 4 cents, or 0.14%, during pre-market trading on Friday. The stock is up 12.82% year-to-date.

The Bottom Line
Shares of Vodafone Group (VOD) have a dividend yield of 7.21% based on last night’s closing price of $28.42 and the company’s annualized dividend payout of $2.05 per share.

Vodafone Group (VOD) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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