The Vodafon (LSE:VOD) share price has reached an excellent level in 2025. Up 44% last year, it easily outperformed the broader stock FTSE100. However, the 96p level is still well below historical levels, which could mean the share price could rise even further next year. Based on my research, here are my predictions for the stock.

Building on a robust foundation

First of all, we need to look at why the share price has outperformed this year. This is mainly due to extensive restructuring efforts carried out over several years. It continues to make significant business changes by reducing underperforming assets and improving capital allocation. This included the sale of non-core businesses and reducing net debt by approximately £9.7 billion. As a result, the efforts undertaken significantly strengthened the balance sheet and improved finances. Investors were clearly impressed with the execution, which led to an raise in share prices.

Another significant catalyst was the merger with Three UK, which took place in the summer. The combined company becomes the UK’s largest mobile operator, serving almost 30 million customers. This should not only aid raise profitability in the future, but also provides significant opportunities for future efficiency. Combining expertise and resources should aid significantly.

Factors supporting growth in 2026

Last month, the company announced it would raise its dividend for the first time since 2019. This was associated with improved earnings prospects. The dividend yield is currently 4.08%, above the FTSE 100 average of 3.06%. Further momentum in this regard is likely to attract income investors.

Improved business diversification also ensures a robust 2026. The Vodafone division is now more focused on higher growth regions such as Africa and parts of Asia. However, if they underperform next year (which I doubt), the company could still do well in key European markets. This diversification can aid maintain revenue momentum and excite investors.

Of course, next year comes with risks. Earlier this month, Ofcom announced an investigation into summer service disruptions. This issue will carry over into 2026, which could result in reputational damage and financial penalties, depending on what is discovered.

Focus on growth

At the current price of 96p, I think the Vodafone share price could reach 127p next year. Currently, the forecast earnings per share for next year is 0.07 points. The average price-to-earnings ratio for the FTSE 100 is 18.2. So, using projected earnings and multiplying them by 18.2, we get a potential share price of 127p.

I believe this is a realistic target price for Vodafone in the coming year, making it an option for investors to consider. If earnings are better than expected, the stock price could rise even more. However, there is also a risk of unexpected costs, so optimism must be tempered with realism.