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Vodafone Share Price: Euro Crash to Parity is a Concern

AACHEN, GERMANY - MARCH 01, 2019: Vodafone store of British multinational telecommunications conglomerate brand logo located in Aachen shopping street Germany. Mobile photo

Vodafone share price has been in a slow recovery pace in the past few weeks as telecommunication shares rebound. The VOD stock price is trading at 127.80, which is about 14% above the lowest level in May. However, it is also a few points below the highest point this year, meaning that the shares have outperformed the FTSE 100 and FTSE 250.

Is Vodafone a good investment?

Vodafone is a major telecommunication company that has operations around the world. The firm’s most important market is Germany, where it generated over €13 billion in 2022. It is followed by the UK, which made over €6.4 billion and Italy, where its revenue rose to over €5 billion.

Vodafone has operations in countries like Spain, South Africa, and Kenya. It also has a large stake in Vodacom, one of the world’s biggest emerging market telecommunication players.

The company’s international diversification has come under pressure in the past few months. In an era where many companies – like GE and JnJ – are going small, some investors believe that Vodafone should break itself apart. It has already done that by creating a separate tower company know as Vantage Towers, that is listed in the LSE.

Some investors, like Cevian, have proposed that the company should separate its business into smaller entities. These investors believe selling some international entities would boost the company’s share price. For example, it would give it more money to buy back its stock. It would also help the company consolidate its business in key markets.

Now, the Vodafone share price has another thing to worry about. Forex. The euro has crashed hard recently and is trading below parity with the US dollar. Further, many emerging market currencies where it operates, like Kenya and South Africa, have crashed. 

The firm’s total income from these countries will be hurt. Further, the company has billions of dollars in debt. Now, with the euro falling, it means that its debt repayments will struggle. The firm has over $18 billion worth of debt. Its other debt comprises currencies like the pound and the Australian dollar.

Vodafone share price forecast

The daily chart shows that the VOD stock price has been rising in the past few days. It has formed an ascending channel that is shown in blue. The stock is also slightly above the 25-day and 50-day moving averages. It has moved slightly below the important support at 128.50p, which was the highest point on April 19th.

Therefore, there is a likelihood that the stock will remain in this range in the coming weeks. If this happens, the next key levels to watch will be at 130p and 125p.

Vodafone share price