LONDON -- After having seen something of a resurgence in recent weeks, shares in Vodafone (LSE:VOD) (NASDAQ:VOD) dropped off today as the market opened, with many analysts downgrading from buy to neutral.
Citigroup was one who downgraded Vodafone, citing elevated merger and acquition risk:
Addressing shortcomings in Vodafone's convergence offering may require M&A in both consumer and business, in our view. In B2B this is unlikely to require a huge deployment of capital but the numbers get larger to achieve a sizable consumer footprint. Assets are scarce with cable and, in places, unbundled local loop operators, still short of national reach.
As one of the biggest constituents of the FTSE 100, the U.K.'s premier market followed suit and on Monday was dragged down with the world's largest wireless phone company by market cap.
The downgrades come ahead of Thursday's trading update for the quarter ended Dec. 31, 2012, which has added to caution among investors. Vodafone's shares fell 2.5%, or 4 pence, back down to 169 pence.
However, this "investor caution" must be noted, and that the multinational telecom company has not actually released any firm news to justify investors jumping ship. I, for one, await Thursday's interim management statement not as a panicked shareholder but as a Foolish one, aware of the long-term benefits that holding the shares for at least three to five years can bring me.
So, too, will City superinvestor Neil Woodford, who owns a significant holding of Vodafone within his high-yield portfolios. The Motley Fool has produced a special report on the eight blue-chip companies favored by Woodford, now updated for 2013. It's completely free, but available for a limited time only. Just click here to have the report delivered instantly to your inbox.
Sam Robson owns shares of Vodafone. The Motley Fool recommends Vodafone. The Motley Fool owns shares of Citigroup. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.