SBI stock falls nearly 4% to 3-month low over bearish call by Goldman Sachs

Goldman Sachs expects State Bank of India (SBI) to face multiple headwinds as its Return on Assets (RoA) reaches its peak.

Paras Bisht

September 06, 2024 / 12:49 IST

SBI shares dropped over Goldman Sachs report which downgraded its rating.

State Bank of India (SBI) share price fell to a 3-month low on September 6 after global brokerage firm Goldman Sachs downgraded its rating on the stock to 'Sell'. SBI stock fell to the day's low of Rs 787.1 per share on the NSE, down 3.9 percent from its previous close. At the time of publishing, the stock was trading at Rs 790.95, declining 3.4 percent.

The sharp fall in the stock came after analysts at Goldman Sachs downgraded it to 'Sell' from 'Neutral'. The brokerage also cut the SBI share price target to Rs 742 from an earlier call of Rs 841 earlier. The revised target price is more than 6 percent lower from yesterday's closing price.

Goldman Sachs expects State Bank of India (SBI) to face several challenges as its Return on Assets (RoA) reaches its peak, leading to a possible reduction in valuation. Due to these challenges, the brokerage has lowered its Earnings Per Share (EPS) forecast for SBI by 3-9 percent for the financial years 2025 to 2027.

Shares of SBI have delivered 22.86 percent returns on Year-to-date (YTD) rate. SBI stock rose 82.97 percent in the last three years.

However, in another development, Goldman Sachs upgraded rating on SBI unit SBI Cards and Payment Services stock to 'Buy' from 'Sell' with a hike in target price, which led to a jump in its share price