VOD Shorts Pull Back as Stock Hits 16-Month High

Vodafone reports full-year results on July 31 after a sharp re-rating that has left the stock up 17% in a month and short sellers notably less convicted than they were six weeks ago.

The clearest story in the data is the retreat of bearish positioning. Borrow availability has expanded dramatically — from around 1,713% in late June to 4,571% now — meaning the lending pool has roughly doubled in slack as shorts have been unwinding. The ORTEX short score has also fallen steadily, from 48.5 in mid-July to 41.1 today, confirming the directional shift. Cost to borrow has remained low throughout at under 0.6%, so the unwind looks orderly rather than forced. Price action supports the read: VOD gained 2.6% on Tuesday alone and is up 7.8% on the week, outpacing most European telecom peers. Freenet rose 4.8% on the week, Tele2 gained 6.3%, but Turkcell fell nearly 9% and TIM dropped more than 10% — making Vodafone's move look genuinely idiosyncratic rather than a sector-wide lift.

The bull case rests on restructuring progress and dividend support. Vodafone cut its annual dividend sharply from around £0.038 to £0.020 per share — announced in May — resetting the payout at a level the business can sustain while reducing debt. The EPS momentum factor score ranks in the 76th percentile on a 30-day basis, suggesting near-term earnings estimates have been nudging higher. At 12.2x forward earnings and an EV/EBITDA of 5.6x, the valuation has re-rated over the past month — P/B has risen nearly 0.1x in 30 days — but remains undemanding by sector standards. The analyst consensus price target of £1.30, versus a current price of £1.23, implies only modest further upside, suggesting the Street sees fair value close to current levels rather than a significant gap to fill.

The bear case is structural. The quality pillar in ORTEX's composite score has deteriorated — falling from 63 in late May to 52 — with ROCE near zero and a roughly 22% decline in one-year sales weighing on balance-sheet signals. The analyst recommendation score ranks in the 99th percentile for relative divergence, meaning the gap between the most optimistic and most cautious views is unusually wide. The most recent earnings reaction, in May, saw the stock fall 4.6% on the day and 6% over five days — a reminder that beats can still disappoint if the guidance narrative disappoints. Notably, the July 27 event logged a 7.5% one-day gain, though the data suggests this may reflect a separate announcement rather than a standard quarterly earnings print.

Thursday's results will test whether the restructuring story has reached an inflection point — specifically, whether management can show stabilising revenue trends in the core European markets at a margin profile that justifies the stock's sharpest one-month rally in over a year.