This stock P/E is cheapest among peers and trading above 200 DMA

The stock is available 18 percent below its 52-week high when most stocks from the sector are just single-digit away from their year-high

January 08, 2021 / 09:55 AM IST
In the FMCG sector, ITC is the cheapest stock in terms of its price to earnings (P/E) valuation ratio compare to its peers and also trading below its 5-years average P/E multiple. The stock is available 18 percent below its 52-week high value of Rs 243 while most stocks from the sector are just single-digit away from their year-high. Interestingly, on technical basis sectors, all major FMCG stocks are trading above the 200-day daily moving average (DMA), it is an indicator generally considered to be in an overall uptrend.
In the FMCG sector, ITC is the cheapest stock in terms of its price to earnings (P/E) valuation ratio compared to its peers and also trading below its 5-years average P/E multiple. The stock is available 18 percent below its 52-week high value of Rs 243 while most stocks from the sector are just single-digit away from their year-high. Interestingly, on technical basis sectors, all major FMCG stocks are trading above the 200-day daily moving average (DMA), it is an indicator generally considered to be in an overall uptrend. (Data Source: ACE Equity). The research firm Centrum Broking has recommended a buy rating on "ITC".
ITC's P/E valuation ratio is lowest compare to its peers and it is also trading below its five-years average P/E multiple.
ITC's P/E valuation ratio is lowest compared to its peers and it is also trading below its five-years average P/E multiple.
ITC trading above its 200-day daily moving average (DMA) is an indicator generally considered to be in an overall uptrend.
ITC trading above its 200-day daily moving average (DMA) is an indicator generally considered to be in an overall uptrend.
According to Centrum Broking in its event update report, ITC’s renewed focus on maintaining cigarette market share, tailwinds for FMCG foods business, strong FCF, high dividend yield and compelling valuations make it more attractive for long term investors. We maintain our estimates and reiterate a strong Buy rating with DCF-based target price of Rs 353, implying 23.6x FY23E EPS. Key risks are a sharp increase in any form of taxation.
According to Centrum Broking in its event update report, ITC’s renewed focus on maintaining cigarette market share, tailwinds for FMCG foods business, strong FCF, high dividend yield and compelling valuations make it more attractive for long term investors. We maintain our estimates and reiterate a strong Buy rating with DCF-based target price of Rs 353, implying 23.6x FY23E EPS. Key risks are a sharp increase in any form of taxation.
Ritesh Presswala Research Analyst at Moneycontrol
first published: Jan 8, 2021 09:55 am

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