The talk over whether or not the Vodafone (LSE:VOD) share price presents good worth rages on. And based mostly on feedback I’ve seen, traders seem to have broadly differing views about how to interpret the group’s most up-to-date buying and selling replace, launched on 4 February.

For the yr ending 31 March (FY25), the group stays on target to report income of round €37bn. Adjusted EBITDAaL (earnings earlier than curiosity, tax, depreciation and amortisation, after leases) of €11bn is anticipated.

The administrators hope that the current restructuring train will lead to a slimmer group, albeit one which makes use of its belongings extra effectively. Right here’s my try at offering a balanced view.

A bullish view

Vodafone’s enterprise in Germany has been struggling. And its efficiency has a fabric influence on the group. Nonetheless, in the course of the third quarter of FY25, there have been some indicators of a restoration, with the administrators reporting “improving customer trends”. A further 23,000 people entered into cell contracts in the course of the interval.

In my view, it’s excellent news that the corporate has agreed to promote its division in Italy for €8bn, following on from the disposal of its Spanish enterprise. This’ll generate some much-needed money to assist cut back the group’s borrowings. And it ought to enhance the return on capital employed.

Encouragingly, internet debt continues to fall. At 30 September 2024, it was €31.8bn, in comparison with €33.2bn a yr earlier. And it’s a lot decrease than it was on the finish of FY20 (€42bn).

Additionally, the group’s coming to the top of a €2bn share buyback programme, which ought to assist enhance earnings per share.

The proposed merger of the group’s UK operations with Three was given regulatory approval in December. The corporate says this’ll promote higher competitors and guarantee higher worth for shoppers.

And a bearish view

Vodafone Germany has been impacted by a change in regulation which prevents the bulk-selling of TV contracts. The division stays loss-making and misplaced 5,000 enterprise prospects in the course of the third quarter of FY25. This contributed to a 7.6% drop in service income, in comparison with the identical interval in FY24.

Promoting its division in Italy will generate some money. Nonetheless, it’ll proceed the pattern of constructing the group smaller. Throughout FY24, the nation contributed €4.67bn to income.

Though the group’s indebtedness is enhancing, it nonetheless stays excessive relative to earnings.

The group’s €2bn share buyback programme’s nearing completion. Nonetheless, for my part, it doesn’t adequately compensate shareholders for the 50% dividend minimize introduced final Could.

Though the corporate’s merger with Three is prone to full within the first half of 2025, I don’t know what this implies for shareholders. Annual price and capital expenditure synergies of £700m are anticipated by the fifth full yr post-completion. However this appears like a very long time away.

On stability

General, though Germany stays a priority, I believe the inventory continues to supply good worth. The 204 listed telecoms firms in Europe have a trailing 12-months price-to-earnings ratio of 13.7. Throughout 4 quarters to 30 September 2024, Vodafone reported earnings per share of 8.59 euro cents (7.12p at present change charges). Making use of the European-wide a number of to this determine provides a attainable valuation of 97.5p.

It is a 39% uplift to its present (28 February) share price. On this foundation, I believe Vodafone could possibly be a inventory for bargain-hunters to contemplate.