For the first time since 2022, Vodafone (LSE:VOD) shares are now back in bullish territory, climbing by over 20% since the start of the year. This upward trajectory comes off the back of continued progress in the telecommunication giant’s restructuring under CEO Margherita Della Valle. But unlike previous turnaround attempts, Vodafone’s starting to show some long-awaited signs of life.

So with an underlying price-to-earnings ratio of just 14, could now be a good opportunity to invest in Vodafone shares? And if analyst projections are correct, how much money could investors potentially make?

Encouraging progress

Last month, Vodafone gave investors an update on operations. And for the most part, things seem to be moving in the right direction. Its recent merger with Three was successfully completed, with integration efforts now underway. Meanwhile, the firm’s African fintech services continue to deliver solid double-digit gains. And even its troublesome German operations seem to be improving, with the rate of sales loss shrinking from 6% to 3.2% versus the previous quarter.

There’s evidently a lot more work to do in Germany, especially considering that it’s Vodafone’s largest market. But the continued slowdown of revenue attrition suggests the company’s making progress in addressing the problems, even in a highly competitive landscape.

Following these results, Vodafone reiterated its full-year guidance for adjusted free cash flow to land between €2.4bn and €2.6bn. And with the Three UK merger being a success, it seems several of the assumptions UBS‘s share price forecast have been met. That’s significant since UBS’s price target stands at 120p – roughly 44% higher than where the stock’s trading today.

Providing that Vodafone shares continue moving towards this target, buying 1,000 shares today for £835 could net a profit of around £360 by this time next year.

Taking a step back

While the prospect of a 44% gain is undoubtedly exciting, it’s important to remember that forecasts always need to be taken with a pinch of salt. Three UK still needs to be integrated into Vodafone’s wider ecosystem – a task that involves execution risk.

Cost overruns and delays would likely hamper margins. Therefore, even after reiterating guidance, the company could still fall short by the end of the fiscal year. At the same time, according to UBS, Vodafone’s German operations also need to return to growth and begin recapturing lost market share. And while there have been some early signs of improvement, it’s so far been relatively slow.

The point is, even if Vodafone shares continue to steadily move in the right direction, there’s no guarantee they’ll reach UBS’s bullish target of 120p.

The bottom line

Operationally speaking, Della Valle’s strategy is seemingly delivering results. But with over €53bn of debts & equivalents on the balance sheet, even €2.6bn of free cash flow might not go very far – a handicap that many of Vodafone’s competitors don’t have.

As such, Vodafone’s turnaround will be a long, multi-year process. And during that time, there may be other more promising investing opportunities to exploit. That’s why I’m not rushing to buy the shares today.