Sector movers: Telecoms fall as Vodafone hit by downgrade

RELATED QUOTES

SymbolPriceChange
VZ47.60+0.50
FNCTF15.09+0.24
GLE.PA43.19+0.54
DTE.DE11.39+0.06
C48.22+0.04

LONDON (ShareCast) - Telecoms stocks were out of favour on Monday, with the sector being dragged lower by mobile phone giant Vodafone (LSE: VOD.L - news) after the stock was hit by a downgrade from Citigroup (NYSE: C - news) .

Shares in Vodafone rose 11.4% in January alone on rumours that the company could dispose of its stake in its Verizon (NYSE: VZ - news) joint venture (JV), Verizon Wireless.

However, shares were taken down a peg on Monday after Citi cut its rating for the stock from 'buy' to 'neutral'.

Analyst Simon Weeden said: "Addressing shortcomings in Vodafone's convergence offering may require M&A in both consumer and business, in our view." However he said that potential targets are limited.

Citi left its 180p target price for Vodafone's shares unchanged.

Opinions from other brokers on Vodafone were mixed today: Societe Generale (Paris: FR0000130809 - news) maintained its 'sell' rating and 100p target price for the stock; while UBS (Berlin: UBRA.BE - news) reiterated its 'buy' recommendation and 200p target.

Rumours that mobile phone groups T-Mobile and Orange are considering a £10bn flotation of their JV, Everything Everywhere, could also be weighing on the telecoms sector today.

By going pubic in London, it is thought that parent companies Deutsche Telekom (Xetra: 555750 - news) and France Telecom (Other OTC: FNCTF - news) , respectively, could raise around £1.0bn each.


Top performing sectors so far today
Personal Goods 21,917.32 +0.46%
Industrial Transportation 2,481.19 +0.34%
Electronic & Electrical Equipment 4,072.34 +0.19%
Automobiles & Parts 5,835.81 +0.12%
Real Estate Investment & Services 1,978.37 +0.12%

Bottom performing sectors so far today
Construction & Materials 3,661.11 -2.70%
Mobile Telecommunications (BSE: MOBILTEL.BO - news) 3,968.73 -2.16%
Life Insurance 5,312.72 -1.99%
Forestry & Paper 8,180.85 -1.81%
Mining 20,234.25 -1.81%

BC