As the FTSE 100 edged higher - albeit down from its 14 year highs of earlier in the day - a notable faller was Vodafone.
There had still been an element of bid speculation in the share price, despite US telecoms group AT&T ruling out a bid several months ago. But with reports that AT&T was in talks to buy satellite television group DirecTV for some $50bn, the idea that it could also snap up Vodafone began to seem unlikely.
So Vodafone shares are currently down 4.8p at 219.65p.
But Morgan Stanley issued a positive note with an overweight rating and 260p price target, even without any bid premium. It said:
Our base case includes no further M&A but still implies high- single-digit upside potential. The stock trades broadly in line with the sector with more than 5% and growing dividend yield.
Vodafone's presence in most big European markets makes it one of the companies most exposed to potential synergies and more rational markets. This drives our bull case of 285p.
[There is] upside to 275p-295p per share in our M&A scenario: We assume a 20-30% control premium for the European assets.
