SBI Cards shares drop 2% after Goldman Sachs downgrades stock to 'Neutral'

The shares of SBI Cards dropped nearly 2 percent on July 2 after Goldman Sachs issued a bearish note for the stock. The shares of the company were trading at Rs 914.50 apiece in the afternoon.

Goldman Sachs downgraded the shares of SBI Cards and Payment Services to 'Neutral' from its earlier 'Buy' call, and kept a target price of Rs 1,006 per share, according to CNBC-TV18. The target price implies an upside potential of nearly 8 percent over the previous closing price.

The international brokerage said that the sharp re-rating in recent months has made the risk-reward profile more balanced in the near term, as per the report. Goldman added that credit costs and loan growth are key areas of focus going forward.

The foreign brokerage further noted that the company's strong share price performance has led to a re-rating of its valuation multiple. This has however raised several investor concerns. It however noted that SBI Card is well-placed to deliver strong medium-term performance, despite the downgrade.