Global brokerages maintain their stances on ITC post analysts meet; see over 30% upside

Global brokerage firms such as Morgan Stanley, CLSA, Jefferies, JPMorgan and UBS maintained their ratings on ITC post the analysts meet as the event turned out to be a non-event but focus on value unlocking in near future is a positive sign.  

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The most aggressive target price of Rs 300 was put out by ITC that translates into an upside of over 30 per cent return from Rs 228 recorded on 14 December.

Contrary to the market expectation, the ITC Limited’s Analysts and Investors Meet 2021 turned out to be a non-event as no major announcement was made.

Also Read: ITC Analysts and Investors Meet 2021 – Key takeaways for investors
https://www.zeebiz.com/companies/news-itc-analyst-and-investor-meet-2021...

The management of ITC highlighted that it will look for growth triggers in all its business verticals. The company will be focusing on premiumization, which has yielded great benefits to it.

The company will be focusing on mergers & acquisitions (M&A) going forward, and might even look at more acquisitions.

We have collated a list of recommendations from various global brokerage firms according to a Zee Business TV report:

Morgan Stanley: Overweight| Target Rs 251

Morgan Stanley maintained its overweight rating on ITC with a target price of Rs 251. The management highlighted that it remains focused on creating sustained shareholder value and is evaluating multiple options. The company remains committed to restructuring the hotels business.

Jefferies: Buy| Target Rs 300

Jefferies maintained its buy rating on ITC post the analysts meet with a target price of Rs 300.

CLSA: Buy| Target Rs 275

CLSA maintained its buy rating on ITC with a 12-month target price of Rs 275. In the FMCG business, the FMCG major is looking to leverage its power brand and drive margin expansion.
 
For the cigarettes business, ITC said that a stable tax regime is positive for the sector. The management also highlighted that it is now open for an alternate structure in its hotels, and infotech business. FMCG value unlocking remains a focus.

JP Morgan: Neutral| Target Rs 238

JPMorgan maintained its neutral rating on ITC with a target price of Rs 238. There is aggression on the FMCG business from the management.

The global investment bank value ITC at 17x FY23E P/E (ex FMCG 13x). “We believe that the upcoming budget session will be keenly watched from ITC point of view,” said the note.

UBS: Buy| Target Rs 280

UBS maintained its buy rating on ITC post the analysts meet with a target price of Rs 280. According to the management, the cigarette volume is likely to grow. There are signs of improvement in the FMCG business.

For hotels, demerger is an ongoing discussion but more likely once India normalizes amid uncertainty around new COVID variant.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)