Source: Sharecast
The bank said it was raising its long-term free cash flow forecasts for the company following its recent strong Q2/H1 2026 results.
Berenberg said it believes that Vodafone can now deliver sustainable free cash flow and dividend growth in the coming years.
"Furthermore, the company has substantial future capacity for value-creation opportunities (eg further share buybacks and small bolt-on M&A), with an increasingly robust balance sheet (circa €1bn is expected to be received in the coming days from Zegona Communications’ share cancellation)," it said.
Berenberg said it was increasingly confident Vodafone can execute well in its core markets. It expects management to deliver modest growth and improving profitability in Germany, helped by improving market conditions.
It also expects management to effectively execute the integration of Three UK, realising its synergy targets in the process.
Finally, the bank said management was set to be a sensible steward of capital, focusing on core markets and on further simplifying the relatively complex group structure.
Barclays downgraded NatWest to ‘equalweight’ from ‘overweight’ as it paused for breath and waited for consensus to catch up on capital. Barclays kept its price target on NatWest unchanged at 700p.
"While we continue to see sector-leading shareholder returns potential (through book growth and dividends), at an undemanding 8x forward PE, we pause for breath following what has ultimately been a strong run in the shares since late-23 lows (up 280% versus Lloyds 150%) as we wait for consensus to catch up on capital," it said.
In a note on the UK domestic banking sector, Barclays lifted its price target on 'overweight' rated Lloyds to 120p from 100p.
"We forecast sector-busting EPS growth of 70% by 2028e, 2x the sector average and circa 20% ahead of consensus, and see compelling valuation at less than 7x '28e PE (versus a European banks average of more than 9x) or 1.3x forward TNAV for a sector-leading 20% return on tangible equity," it said.
"We expect this improving outlook to come into sharper focus at this summer's strategy update, alongside a potential move to half-yearly buybacks."
Elsewhere, Citi initiated coverage of Playtech at ‘buy’ with a 355p price target, which it said implies around 34% upside.
Playtech is a B2B-focused content and services provider to the online gambling industry.
Citi said it believes the shares are undervalued, even when adjusting for a potential adverse outcome of the Evolution litigation. Sweden’s Evolution has accused Playtech of hiring Black Cube, an Israeli private intelligence firm, to investigate it.
It announced in October last year that one of Playtech’s subsidiaries had commissioned Black Cube to prepare a 2021 report that contained "highly inflammatory and knowingly false claims" about it.
"We see strong potential for Americas growth (FY25/26e Americas Revenue forecasts +4%/+8% above Visible Alpha consensus), with notable opportunity in the US as it invests in its Live product & capacity," Citi said.
It noted that 81% of Playtech’s 1H25 B2B revenues were generated in regulated markets and said it believes greater earnings visibility and lower unregulated market risk warrant a premium to peers.
"Our FY25/26e group adjusted EBITDA forecasts are +6%/+6% versus Visible Alpha consensus," Citi said.
"Key risks include an adverse Evolution case outcome, regulatory tightening, slower US regulation, IP protection and cyber security," it added.
