ITC‘s share price rocketed on Wednesday morning, going up over 8% to hit an intraday high of ₹438.

What Happened: The massive jump today comes as several brokerages remained positive on the stock. Goldman Sachs maintained its “buy” rating for the stock with a price target of ₹480. The analysts said that the company has seen a significant transformation since March 2018. The FMCG businesses’ profitability has surged sharply, the analysts added.

CLSA upgraded the stock’s rating from “outperform” to “buy” but cut the price target to ₹468 from ₹486. The brokerage firm said that while cigarette volumes might remain muted, the company is looking at the premiumisation of the segment.

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HSBC also upgraded the stock’s rating to “buy” from “hold” with a target price of ₹480. The analysts said that the recent correction in the stock implies an attractive valuation for its cigarette business. The brokerages said the correction in the ITC share price provides an opportunity to buy the stock even as taxation overhang continues.

Morgan Stanley also maintained its “overweight” rating for the stock with a price target of ₹491. The analyst said that their positive view of the stock is based on several factors. Firstly the analysts expect a moderate cigarette tax environment. The analysts also expect the non-cigarette business to continue to scale up. The analysts said that the stock is currently trading at reasonable valuations and the BAT stake sale will clear the uncertainty around the stock’s performance.

The upbeat outlook from the brokerages helped the stock jump back into the green after two days. Shares of the company have been under pressure since one of its largest shareholders, BAT, has said that it will be cutting stake in the tobacco giant.

Price Action: ITC's share price was up 5.62% at ₹427.20 in morning trade on Wednesday.

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