Vodafone - with the market wanting to buy value Vodafone is an obvious candidate In May we argued Vodafone''s FY21 guidance seemed to incorporate a worst case for roaming / COVID headwinds, and it seems 1H201/21 have vindicated this view. Organic service revenue (declining 40bps, but growing +1.5% ex-roaming) and EBITDA (c. 4% ahead of consensus) both handsomely beat lowered expectations. We think Vodafone is the obvious ''deep value'' candidate in the sector, levered to a roaming recovery without all the structural overhangs of incumbents. What do we know today that we didn''t yesterday? Progress in 4 key areas Vodafone made a decent argument that 1)their lobbying for a better social contract for telcos was having some effect (better spectrum outcomes in Hungary, NL, some state support for rural rollout in the UK etc) 2) Spain has undergone bigger structural changes than people give them credit for (which is evidenced by the better than expected results), 3) they can continue to grow and take share in the business segment from structurally challenged incumbents, and 4) German underlying results remain robust, despite ongoing Unity Media issues (a risk we flagged in March) that they are working on fixing. Has the investment case changed? In upgrading Vodafone in 2019 we argued that post dividend cut the argument over the sustainability of the balance sheet would evaporate, just as top-line growth would re-emerged (supported by our more bullish STAMP data), which could be boosted by further cost cutting leading to could lead to solid EBITDA and cash flow growth for Vodafone, and then organic de-leveraging could be augmented by disposals. COVID blew a significant hole in that thesis, but ultimately a temporary one, and now one can look forward to a better 12 months ahead. Changes to estimates We update our model to reflect 2Q21/21 results, driving a 1-2% upgrade to our medium term EBITDA estimates, which follows through to a c.5-7%...