Vodafone (LSE:VOD) shares have had a remarkable 12 months. From a near-30-year low of 67.8p in May 2025, the FTSE 100 telecoms giant has surged to around 111p today – a gain of roughly 63.7% on price alone, or around 77% when including dividends.
For a stock that spent the better part of a decade in steady decline, that kind of move demands attention. So could Vodafone be gearing up for a Rolls-Royce-style multi-year recovery? Or has the rebound already run out of road?
What’s driving the rebound and can it continue?
The turnaround’s been driven by a genuine shift in the business. Under CEO Margherita Della Valle, Vodafone’s been executing a sweeping restructure, selling non-core assets, cutting costs aggressively, and sharpening its focus on higher-return markets.
The completion of its merger with Three UK has also materially strengthened its domestic competitive position. And analysts are taking note.
Berenberg recently reiterated its Buy recommendation with a price target of 123p, while analysts at Deutsche Bank think the telecoms stock could climb to as high as 155p by this time next year.
Both are citing the credibility of the turnaround and Vodafone’s improving free cash flow trajectory. And with the Three UK merger integration seemingly quite smooth and a leaner cost base emerging, the argument for continued momentum’s real.
What’s on the horizon?
Are there still reasons to be cautious? Yes. And they are worth taking seriously. While the company has started making progress on the deleveraging front, Vodafone’s balance sheet remains heavily indebted.
Selling off non-core assets has helped raised some initial capital quickly to get things under better control. But bringing down gearing further will depend on continued solid operational execution in markets where competition’s fierce.
For example, Germany has historically been the group’s most profitable market. But in recent years, it’s faced mounting pressure from cable competitors eating into broadband and TV revenues. And while there are green shoots emerging, there’s still a long road ahead with no guarantee of success.
In fact, this is one of the reasons why the team of analysts at JP Morgan have issued a Sell recommendation with a 85p price target – around 23.4% lower than where Vodafone shares are trading today.
Where does that leave investors today?
The Rolls-Royce comparison’s tempting, but it pays to be honest. Vodafone’s recovery is earlier-stage, operating in a far more commoditised industry and against a more complex competitive backdrop.
That said, the momentum’s real, the direction’s right, and for patient investors willing to back the turnaround, there’s a compelling argument that Vodafone shares still have meaningful ground to recover at today’s valuation.
All things considered, I think the story’s far from over. And it’s a stock investors should be watching closely.
Zaven Boyrazian has no position in any of the shares mentioned.
