Citi Maintains 'Buy' On This Tata Stock With A Potential Upside Of Over 22%

Shares of Tata Steel- one of the Nifty metal index constituent has fallen more steeply than the index over the last 3-month period. Nevertheless, in trade today in tandem with the broader markets, shares of the company settled with gains of 2.72% at Rs. 884.8 per share on the NSE. The stock is trading close to its 52-week low price of Rs. 842.65 hit on June 20, 2022.

Citi Maintains 'Buy' On This Tata Stock With A Potential Upside Of Over 22%

Further sentiment in the stock improved after global research firm Citi retained its 'Buy' call on the stock with a reduced target price of Rs. 1085 as against the earlier set out target of Rs. 1800 per share. This still offers a potential opportunity to make over 22% returns from the last traded price of Rs. 884.8.

City has lowered its forecast on the company's earnings as well as EBITDA for Fy23/24 by 32%/34%, on the back of lower realisations led by weakness in China's export prices that is seen to impact the company.

"Tata Steel stock may not hit the 2020 trough of 0.5x given China stimulus expectations. Balance sheet is also strong, perhaps strongest in the last 15 years," it added. Bloomberg further cited that the research firm believes now to be a good time for bottom-fishing as the company's 'price-to-book valuations at 0.8x aren't too far from 1 standard deviation below mean (0.7x)'.

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