On Thursday, Tata Steel shares saw a great rise. During the trading, the stock jumped 2.1% to an intra-day high of ₹ 153.50. Global brokerage firm JP Morgan contributed significantly behind this surge, which has fixed the target price ₹ 180, retaining the ‘overweight’ rating on Tata Steel.
This target shows a possible increase of Wednesday’s closed price of ₹ 150.30 to 20%.
Reasons for the boom in Tata Steel
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1. Expectations of improvement in European business
According to JP Morgan, Tata Steel has several positive indicators of improving European business income.
- European steel spreads have increased significantly:
- Urban-by-date gain of 18%
- More than 60% increase on spot basis
- Recent developments such as Germany’s Infrastructure Fund Declaration have not yet been fully evaluated by investors.
- Investors have increased interest in Tata Steel during the ongoing marketing events in Hong Kong and Singapore.
2. Ebitda’s big boom in estimates
JP Morgan has extended EBITDA/T estimates for the European segment of Tata Steel for FY 2026-27:
- Previous Estimate: $ 19 and $ 27 per ton
- New estimate: $ 68 and $ 70 per ton
Due to this, JP Morgan has increased the overall Ebitda estimates of Tata Steel by 8-11%.
Opinion of analysts: buy or sell?
35 analysts’ opinion on Tata Steel:
- 21 Analysts have advised ‘bye’ (buying).
- 8 has recommended ‘Hold’.
- 6 has rated ‘SAIL’ (selling).
Tata Steel: Tata Group’s third best performing stock this year
Tata Steel has increased by 12% in 2024.
It has become one of the top-performing companies of Tata Group:
- Banaras Hotels: Great Rally of 47%
- Tata Consumer Products: Growth more than 4%
- Tata Steel: 12% lead
