Market Report: Goldman Sachs drop Vodafone from their buy list


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What with Greece, China and all the other factors moving the stock market, Vodafone bid chatter has been put on hold recently.

But analysts at Goldman Sachs and UBS set the cogs of the rumour mill in motion again. The mobile giant has been quiet since it revealed in June it was in talks over a potential asset swap - not a whole merger - with John Malone’s Liberty Global.

Goldman’s number crunchers dropped Vodafone, down 2.2p to 235.7p, off their buy list, deciding the recent share price rise on the back of the Liberty news has made the stock less attractive.

Trimming the target price to 250p, its analysts speculated on the possibility of Liberty buying Vodafone’s businesses in Germany, the UK and the Netherlands, which is the parts US billionaire Malone was said to be eyeing with interest.

Meanwhile, UBS estimates a potential tie-up could be worth £8.5bn to £25.4bn. “We estimate 100 per cent of these synergies would translate to 32-96p per Vodafone share,” added the analysts, who have a buy rating and 265p target price.

The FTSE 100 finished dead flat at 6,753.75 with investors staying on the sidelines ahead of the Greek parliament’s vote on a bail out deal. Builders’ merchant Travis Perkins rose 60p to 2,224p as Berenberg lifted its recommendation to buy, while Plumb Center owner Wolseley ticked 44p higher to 4,304p as the German broker bumped up its target price to 4,600p. “Wolseley and Travis Perkins have the best opportunity to deliver sustainable market share gains,” Berenberg’s analysts argued.

Peppa Pig maker Entertainment One was the runt of the FTSE 250 litter as its largest shareholder dump a large chunk of its stake. The TV and film rights owner, down 32.9p or around 9 per cent to 330p, saw Marwyn Value Investors sell 9 per cent of its stake in a placing to institutional investors, leaving it with 17.9 per cent. Marwyn has decided to cash in at a time when Entertainment One’s share price has started to level off following years of strong growth. In the small-cap world, Imaginatik shares drifted 0.75p lower to 7p as its revenues rose by just 15 per cent to £3.34m over the last 12 months – not overly impressive for a high growth company.