An analyst’s target price is a forecasted future value for a stock, reflecting the analyst’s perception of a fair market value. This projection considers the company’s past performance, as well as its future objectives and strategic plans. Conversely, a lower target price suggests the analyst’s belief that the stock is expected to decrease in value.
Here are two Large-cap stocks with an upside of up to 19%
LTIMindtree Ltd
LTIMindtree Limited provides information technology services and solutions. The Company offers analytics and information management, enterprise integration, applications management, cloud computing, testing, and consulting services, as well as geographical information and manufacturing execution systems. LTIMindtree serves customers worldwide.
The company’s revenue has increased by 4.6 percent yearly, from ₹ 8,620 crores in Q3 FY23 to ₹ 9,017 crores in Q3 FY24. In the same time frame, net profit has increased by 17 percent from ₹1,001 crores to ₹ 1,169 crores.
Jefferies has cut a ‘buy’ rating on LTIMindtree Ltd. with a target price of ₹5,890 per share, representing an upside potential of up to 13% from Tuesday’s trading price of ₹5,210 apiece.
Jefferies has adjusted its estimates downward by 5-9%, accounting for revenue synergies. The firm anticipates LTIMindtree to achieve approximately a 15% EPS compound annual growth rate (CAGR) from fiscal year 2024 to fiscal year 2026.
In 2024, the stock price has already declined by 19%. The brokerage emphasized that the existing risks are factored into the price, particularly given that the stock is trading at 28 times, consistent with its five-year average
According to Jefferies, the resignation of the CFO and other senior executives implies integration challenges, potentially causing a delay in achieving revenue synergies from the merger.
Jefferies suggests that the company might require more time to realize revenue synergies from the merger, especially considering that the combined entity generated $4.3 billion in revenue for the 12 months ending December 2023.
GAIL (India) Ltd
GAIL (India) Ltd. is engaged in natural gas exploration and production, processing, transmission, distribution, marketing, and related services. The company has diversified into petrochemicals, telecoms, and liquid hydrocarbons.
Motilal Oswal has initiated a ‘buy’ rating on GAIL (India) Ltd. with a target price of ₹215 per share, representing an upside potential of up to 19% from Tuesday’s trading price of ₹181 apiece.
Gail Ltd’s revenue has slightly declined by 3.3% yearly, from ₹35,885 crores in Q3FY23 to ₹34,698 crores in Q3FY24. During the same time frame, net profit jumped by 702% from ₹398 crores to ₹3,193 crores.
After inspecting the GAIL plant in Vijaipur, Motilal Oswal analysts emphasized that the company’s management outlined two forward-looking initiatives crucial for their net zero and gas penetration strategies.
The first project involves a 4.3 tons per-day green hydrogen initiative, crucial for achieving decarbonization goals and representing a significant step toward the company’s overarching aim of reaching 20% hydrogen blending in natural gas. Additionally, GAIL (India) underscored the importance of the small-scale LNG project (SSLNG).
Motilal Oswal analysts express optimism regarding GAIL as the capital expenditure cycle diminishes. They note that the company is actively seeking new investment opportunities in areas such as green hydrogen, SSLNG, and the conversion of coal to gas/chemicals. With a FY26 price-earnings ratio of 11 times and a current dividend yield of 2%, the analysts consider the valuations to be reasonable.
Written by Omkar Chitnis
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