Tata Steel share price target cut by Nomura; Find out why UBS is 'neutral' on the stock
Résumé détaillé
The price target cut from Nomura is largely to reflect the lower EBITDA estimates for Tata Steel's European business across financial year 2028 and 2029, reflecting lower utilization and higher costs from project delays and the West Asia crisis.
Shares of Tata Steel Ltd. are in focus on Wednesday, November 11, as global investment banking firms have mixed views on the stock after its September quarter results.
Nomura has a "buy" recommendation on the Tata Steel but has cut its target price, indicating an upside of 13%, while UBS has a "neutral" rating but sees an upside potential of 19% from its previous close.
Nomura has a "buy" rating on the stock but has cut its target price to ₹210 from its previous ₹240. This indicates an upside of 13.6% from its previous closing price.
It said the company's Netherlands business' on the company's earnings before interest, taxes, depreciation, and amortisation (EBITDA) is likely to remain positive in the third quarter while the India EBITDA will expand.
The price target cut is largely to reflect the lower EBITDA estimates for Tata Steel's European business across financial year 2028 and 2029, reflecting lower utilization and higher costs from project delays and the West Asia crisis, Nomura said.
The investment banking firm has cut its FY28 and FY29 EBITDA projections for Tata Steel by 7% each to ₹40,800 crore and ₹46,100 crore, respectively.
Its estimates for the India business are unchanged. Nomura has cut its one-year forward enterprise value to EBITDA multiple to 7x from 8x to factor in the loss of iron ore mines by financial year 2030.
The near-term EBITDA estimate also includes higher iron ore sales, which are less margin accretive than steel volumes, Nomura added.
UBS has a "neutral" rating on Tata Steel and target price of ₹220. This indicates an upside of 19% from its previous close.
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