Jubilant Foodworks and ITC among the stocks that are on investors’ radar on Tuesday.
Brokerage: Morgan Stanley | Rating: Equal-weight
The research firm highlighted the management commentary of maintaining its current same store sales growth trend for the current fiscal. These views, it said, are seen as a marked shift. The short term prognosis is undoubtedly strong for the company, he added. The key pivot of improvement is ‘Everyday Value’ offer on core pizza offerings.
Brokerage: Macquarie | Rating: Outperform | Target: Rs 1,465
Macquarie said that the company was its top pick in the consumer discretionary space. It is building in 30 percent CAGR EBITDA growth for FY17-20.
Brokerage: Kotak Institutional Equities | Rating: Sell | Target: Rs 900
The brokerage firm said that the PAT at 5-year high underscores the cyclical nature of the business. It will refrain from going overboard on the short term prognosis and values the stock at 32 times June 2019 earnings per share (EPS) estimates.
Brokerage: Ambit | Rating: Sell | Target: Rs 822
The brokerage said that the valuation of 58 times FY19 EPS is expensive and that the SSSG was no longer a key margin driver.
Brokerage: Nomura | Rating: Reduce | Target: Rs 919
The research firm said that the valuation was running ahead of a recovery and that core business challenges remain.
Brokerage: Citi | Rating: Sell | Target: Rs 935
Citi termed the company’s Q1 operating profit to be in line with estimates and that the stock was already pricing in the recovery.
Brokerage: Deutsche Bank | Rating: Buy | Target: Rs 1,400
The global financial services firm said that the company’s June quarter performance was driven by higher number of orders and increase in transaction size. The company said that it was its top pick in the consumer discretionary space along with Titan.
Brokerage: CLSA | Rating: Outperform | Rating: Rs 2,050
CLSA highlighted that the operating profit at 19-quarter high was led by strong volume growth. Further, it said that Jamul plant aided volumes and helped in lowering overall unit costs.
Brokerage: Goldman Sachs | Rating: Neutral | Target: Rs 1,750
The global research firm highlighted that the current valuation adequately reflected the cement upcycle benefits. It increased the 2017-19 volume estimates by 1 percent and reduced cash costs by 1 percent.
Brokerage: Credit Suisse | Rating: Neutral | Target: Rs 310
The brokerage house cut the FY18-20 estimates by 10-12 percent.
Brokerage: CLSA | Rating: Sell | Target: Rs 285
CLSA downgraded the stock as earnings outlook for the company weakened. Further, it said that ITC will have to explore options in 74-mm category to protect volumes. CLSA estimates 10% hike in taxes from pre-GST levels and hence the company will have to raise prices by 5 percent to maintain net realisations. The brokerage house also cut the company’s earnings per share (EPS) estimates by 6-10 percent as it lowered cigarette EBIT forecast to mid-single digits.
Brokerage: Morgan Stanley | Rating: Equal-weight | Target: Rs 285
Morgan Stanley, on its part, highlighted that the company will need 12-13 percent weighted average cigarette price hike from here on, along with 20 percent price increase in KSFT segment to offset tax increase. Further, it expects an incremental 8-9 percent pricing action over the next few days. It also forecasts 3 percent volume decline in FY18 against earlier estimates of 5 percent growth. It also sees 6% cigarette business EBIT growth against 20% earlier.
Brokerage: Kotak Institutional EquitiesThe brokerage house said that its forecast of cigarette EBIT growth of 20 percent in FY18 may be cut by 15 percent. The company may revise prices upwards to pass on the incremental taxation hit. Further, it added that it could be another year of volume fall and single digit EBIT growth.