Citi Says Vodafone Avoiding Broad Risk From Brexit

Citi reported telecoms avoid broad risk from the U.K.'s pending departure from the EU, driven by data growth, fixed line improvements, strong balance sheets, potential market consolidation and supportive regulatory framework.

Analyst Simon Weeden said the pace of decline is clearly decelerating and fixed incumbent growth now positive.

"Wireline improvement partly driven by customers upgrading to fast broadband, incumbents regaining market share. Data growth is supporting improvement in mobile as the drag from repricing voice and text moderates," Weeden wrote in a note.

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Among telecoms, Weeden said Vodafone Group Plc (ADR) VOD is well diversified, offering good yield, with improving top-line and EBITDA growth and dividend cover. The analyst, who has a Buy rating on the stock, said the company gets 11 percent of EBITDA from the UK, and 55 percent from the rest of the EU.

At the time of writing, ADRs of Vodafone were up 1.65 percent to $30.47.