Jefferies Expects 23%-39% Upside In Tata Dividend Stock, Upgrades Target Price

Global brokerage firm, Jefferies upgraded the target price of Tata Group stock, Tata Motors Ltd to Rs 700 apiece from the previous target price of Rs 665 apiece. The brokerage firm expects an upside of 23.02% if investors decide to buy Tata Motors share at the current market price of Rs 569.55 per share. Jefferies anticipates a maximum potential return of 39% in Tata Motors stock with a price target of Rs 790 per share.

According to the analyst, "the price target of Rs 700 is based on 11X FY25E EV/ EBITDA for India CVs, 10X FY25E EV/EBITDA for India PVs, 2.3X FY25E EV/EBITDA for JLR, and 50% discount to transaction value in stake sale to TPG for India EVs."
Meanwhile, in the upside situation, the global brokerage firm expects target price of Rs 790 apiece thus offering a maximum potential return of 39% if investors buy Tata Motors stock at current market price of Rs 569 per share.

According to Jefferies the price target of Rs 790 is based on, "12X FY25E EV/EBITDA for India CVs, 10x FY25E EV/EBITDA for India PVs, 2.0X FY25E EV/EBITDA for JLR, and 50% discount to transaction value in stake sale to TPG for India EV business."
"We expect both JLR and India businesses to perform well in FY24, driving strong earnings growth and deleveraging. By FY25E, we expect EBITDA to be 2.1X of FY23, EPS to rise to an all-time high, and the auto balance sheet to turn to net cash. Our FY24-25 EBITDA and EPS are 11-12% and 40% above Street, respectively," added Jefferies report.

Tata Motors Stock Performance & Return: Last trading price of Tata Motors share is Rs 569.55 per share with intraday gain of 0.23%. Its 52-week high price is Rs 576.50 per share and 52-week low price is Rs 375.50 per share, respectively. The large cap auto maker has a market capitalisation of Rs 1,89,175.50 crore. Tata Motors share has given return of 37% in last 3-months only, 44% return YTD, 45% return in last 1-year, 63% return in last 2-years, and 501% return in last 3-years.

Tata Motors Dividend: The company declared final dividend of Rs 2 per Ordinary Share of Rs 2 each (@100%) and Rs 2.10 per 'A' Ordinary Share of Rs 2 each (@105%) for the financial year ended March 31, 2023. The dividend, if declared at the AGM, shall be paid to the eligible shareholders from August 14, 2023 onwards. It will go ex-dividend on July 28, 2023.

Tata Motors About: Tata Motors Limited, a USD 35 billion organisation, is a leading automobile manufacturer with a portfolio that includes a wide range of cars, utility vehicles, trucks, buses and defence vehicles. Part of the USD128 billion Tata group founded by Jamsetji Tata in 1868, Tata Motors is among the world's leading manufacturers of automobiles, according to its official website.

Disclaimer: The stock has been picked from the brokerage report of Jefferies. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.