Vodafone Group plc (LON: VOD), on Tuesday, secured regulatory approval to offload its 70% stake in Vodafone Ghana (formerly known as Ghana Telecommunications Co.) to Telecel Group.
Vodafone Group is pulling out of Ghana
“NCA” – or the National Communications Authority today accepted the revised proposal that Telecel submitted in December to move ahead with the said transaction. Its previous plan was rejected for not meeting regulatory standards.
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That effectively ended Vodafone’s 15-year tenure in Ghana that started with a $900 million investment in 2008. The stock market news arrives only weeks after Nick Read stepped down as its top boss.
Put together, these developments made Bank of America analyst David Wright recommend buying Vodafone shares that have been in a downtrend over the past twelve months.
Why is BofA bullish on Vodafone stock?
In a note on Tuesday, Wright shared his optimism on Vodafone Group. Under new management, he wrote, the telecommunications company could refocus on Germany – its largest market that delivers more than 40% of its operating free cash flow.
A clear miss has been poor execution in Germany, but this looks to be recovering following management change, while we think mixed execution of digital cost-cutting targets can be reinvigorated.
The analyst sees upside in Vodafone shares to £1.31. If true, it promises a whopping 41% return to anyone who buys this stock today.
On top of that, the British multinational pays a rather lucrative 8.33% dividend yield that makes up for another great reason to own Vodafone stock.
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