Vodafone Group is expected to post 'growth deterioration' in its financial results Thursday.
Last month Deutsche bank lowered its recommendation from 'buy' to 'hold' citing concerns about the telecom company's worsening cash returns.
"We forecast growth deterioration through calendar 2013 with the outlook for financial FY14 set to confirm declining free cash flow (FCF), no further dividend-per-share (DPS) growth and a scaled down buyback to avoid increased leverage."
Start your trial of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Start your trial
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Deutsche Bank said it anticipates organic service revenues to falter further this year, with a return to positive growth unlikely until 2014.
Latest Videos FromMoneyWeek
It also reduced its target price for the shares from 225p to 175p.
Analysts at Jefferies expect there will be no rise in dividends per shares (DPS) from the 10.19 guided in the fiscal year 2013.
They said Vodafone may show reliance on its Verizon Wireless joint venture with Verizon to sustain DPS growth.
It comes following reports Verizon wants to buy out Vodafone's 45% stake in Verizon Wireless.
"The urgency of fixing strategic weaknesses in the core may force Vodafone to accept an unsatisfactory [Verizon Wireless] endgame," Jefferies said in a note.
"...Vodafone can expect ongoing dividends from [Verizon Wireless] but it really needs to preserve this cash to fund strategic acquisitions."
INTERIMS
Mcbride
INTERIM DIVIDEND PAYMENT DATE
FirstGroup
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Consumer Credit (US) (20:00)
ECB Interest Rate (EU) (12:45)
Industrial Production (GER) (11:00)
Productivity (US) (13:30)
Q4
Smith & Nephew
FINALS
Beazley, Smith & Nephew
IMSS
Avon Rubber, Supergroup, Vodafone Group
EGMS
Hotel Corporation (The)
AGMS
Avon Rubber, BlackRock New Energy Inv Trust, Compass Group, Downing Absolute Income VCT 1, Downing Absolute Income VCT 1 'C' Shares , Downing Income Vct, Downing Income Vct 4, Paragon Group Of Companies, Thomas Cook Group, TUI Travel, Unicorn AIM VCT
TRADING ANNOUNCEMENTS
Bellway
UK ECONOMIC ANNOUNCEMENTS
Balance of Trade (09:30)
BoE Interest Rate Decision (12:00)
FINAL DIVIDEND PAYMENT DATE
Cardiff Property, JPMorgan Asian Inv Trust
Q1
TUI Travel, TUI Travel
