Vodafone on slide as Goldman lowers aim

EUROPE'S biggest mobile phones operator, Vodafone, slid 2 3/4p to a two-and-a-half year low of 150 1/4p today as a leading City broker slashed its target price for the shares and its profits forecast.

US house Goldman Sachs has reduced its target price from 300p to 240p, reflecting lower revenue growth and a big increase in capital spending. On its calculation, Vodafone's sum-of-the-parts valuation is about 247p a share.

Goldman has also lowered its pre-tax profit forecast for 2001-02 from 5.34 billion to 5.05 billion to reflect the slowdown in revenues. Worries about the decline in the telecom industry worldwide, the huge amounts spent on the next generation of phone licences and a possible market overhang of unwanted shares have seen Vodafone's share price drop from a peak of almost 400p since last year.

Goldman says the shares remain on its recommended list but warns that investors may have to wait until the fourth quarter of this year before seeing any improvement in sentiment generally. Rival Cable & Wireless firmed 2p to 400p, fuelled by reports that the group may raise a further 4 billion from the sale or demerger of its interests in the Caribbean.

The rest of the equity market made a sluggish start to the week, partly reflecting Friday's setback for the Dow and Nasdaq. The FTSE 100 index fell 13.7 points to 5652.0 in thin trading.

Hanson stood out with a jump of 18 1/2p to 514 1/2p. The building products group has made an encouraging start to the year, enjoying strong demand in housing because of low interest rates. The group says it is happy with City forecasts for profits pitched around the previous year's 132 million.

Standard Chartered lost 5p to 943p as broker Credit Lyonnais Securities urged clients to switch into rival HSBC, 3 1/2p better at 848p. It says that the slowdown in the US economy has affected both banks but that, while this has been reflected in the HSBC share price, it has still to be taken into account by Standard's share price.

Lattice advanced 1/2p to 140 1/2p as Goldman Sachs began coverage with a market outperform rating and a target price of 180p.

It believes the current share price discounts the downside risks of a tough review for its Transco subsidiary. But rival Dresdner Kleinwort Wasserstein is urging clients to reduce after warning the review could be worse than the market had feared.

Oil shares were a touch firmer, boosted by broker UBS War-burg raising its forecast for the price of Brent crude by $1 to $27.25. BP put on 3p to 617p while Shell hardened 5 1/2p to 610 1/2p and Enterprise Oil gained 6p to 609 1/2p. Independent television broadcaster Granada dropped 6 1/2p to 141 3/4p after admitting it was close to ditching ONdigi-tal because of the Government's decision to change the rules on media ownership for at least another few years. In a letter to Prime Minister Tony Blair, Granada said the decision could be disastrous for ITV and could leave the company vulnerable to takeover by overseas broadcasters.

Granada has seen its share price shrink considerably this year from a peak of 228p because of uncertainty about the future and the dramatic fall in advertising revenue. Its partner in the ONdigital venture, Carlton Communications, fell 12 1/4p to 321 1/4p.

lPrices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed in the tables. Ofex prices relate to the previous close.

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