LONDON (ShareCast) - (Sharecast News) - Analysts at Berenberg cut their target price for shares of Vodafone despite what they said was its cheap valuation and 10.5% dividend yield.
To back up their case, they pointed to the three reasons why investors typically shunned telecoms companies: a dearth of growth, excessive leverage their complexity.

"It is hard to get too excited about M&A when the underlying operations are expected to keep underperforming, as shown by only a muted share price reaction to the recent UK merger news," they wrote in a research note sent to clients."

They did keep their recommendation for the shares at 'hold', but the target price was reduced from 95.0p a share to 85.0p.

On their estimates, Vodafone shares were changing hands on nine times forecast earnings.

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