On August 6, 2020, Barron's magazine published an article on Vodafone (NASDAQ:VOD) stating that the shares have bottomed based on the following reasons:
- The company has put together €1 billion cost cutting plan.
- Potential upside from introduction of 5G.
- Assets that they have marked for disposal could generate cash and dispose of under performing assets.
- The demand for data is exploding due to the lock down caused by the COVID-19 pandemic.
The company saw lower churn rates partly because of the pandemic driven lock downs. The company is also reaffirming its guidance and estimates that it will generate €5 billion in free cash flow. Germany is Vodafone's largest and most important market. It accounts for 34% of the company's EBITDA. Given that Germany has the virus under control, that market has been resilient through this global crisis.
Exhibit: Vodafone's Most Important Market is Germany
(Source: SeekingAlpha)