Why Global Brokerage Raised Target On This Tata Stock By 43%

Shares of Indian Hotels Company have had a great year on the bourses, going up over 80%. But, analysts think the Tata Group stock still has some steam left.

What Happened: UBS reiterated its ‘buy’ hotels giant raising the target price to ₹715, up 43% from its previous target of ₹500 per share. The revised target implies a potential upside of around 19% from the stock’s current market price of around ₹600.

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The analysts believe that the acceleration in earnings will be driven by operating and financial leverage. The brokerage firm also mentioned various growth drivers that could enhance revenue and profitability. As per the brokerage, these include the company’s internal assets, strong cash generation capabilities, and multiple avenues for growth. The brokerage added that “both earnings upgrades and embedded value of optionality should support the re-rating.”

Shares of the hospitality giant were in the red as the broader market was crashing due to the rising tension between Iran and Israel. The stock has had a tumultuous past week. In the last six sessions, the stock closed in the red on five occasions.

Price Action: Indian Hotels Company’s share price was down 1.23% to trade at ₹600 in the late hours of trading on Monday.

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Posted In: EquitiesPrice TargetReiterationMarketsAnalyst RatingsIndian Hotels CompanyTata Group