Tata Steel shares rally over 4%. Check out Jefferies’ target price

Jefferies upgraded its hold rating on Tata Steel to a buy rating with a target price of Rs 150, implying an upside potential of 28% from the current market price of Rs 117 per share.

“After almost a year of cautious view, we turn positive on India metals; China started to ease Covid-19 policy and support its ailing property sector. We believe the worst-margin quarter for Indian Steel, and the big chunk of earnings cuts for Tata Steel are behind,” the brokerage firm Jefferies said.

“Tata Steel’s PB and EV/IC valuations are close to its long-term averages, which we find attractive amid its improving asset footprint and balance sheet. We upgrade Tata Steel from hold to buy,” it added.

At 10.56 am, the scrip was trading 3.8% higher at Rs 117 over its previous day’s closing price of Rs 112.65 apiece. The stock has surged nearly 37% in the last six months, while it has risen only 2% in the last year.

As per Trendlyne data, the highest target price for the stock goes up to Rs 180, while the average target price estimate is Rs 118.2, an upside potential of 1% from the current market prices.

Out of the 28 analysts covering the stock, 17 have strong buy and buy ratings, four have strong sell and sell ratings, and the other seven have hold ratings.
“We can say that there is a pre-budget rally, especially in the economic-centric stocks like sugar stocks, fertilizer stocks, and metals where we saw good momentum,” says Rameshver Dongre, Research Analyst – Equity Research at CapitalVia Global Research

The overall trend of the Nifty Metal Index is bullish on the long-term chart after a correction index has taken the support of Rs 6,200 and resumed the uptrend.

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