Analyst's Pick: JP Morgan retains ‘neutral’ on Tata Steel
JP Morgan has retained its ‘neutral’ rating on Tata Steel with a price target of Rs 155, citing bleak outlook on the sector.
By ET Bureau |
Tata Steel
Research: JP Morgan
CMP: Rs 156
Target price: Rs 155
JP Morgan has retained its ���neutral��� rating on Tata Steel with a price target of Rs 155, citing bleak outlook on the sector.
"With European steel environment remaining challenging, end demand visibility low, term debt at $10 billion and FY10 (estimated) adjusted net debt equity at 2.3 times, we remain ���neutral��� on the stock. Working capital release at Corus and the company���s intention to pre pay $450 million of debt at Corus from asset sales at Teesside are key positives. While adjusted FY10E price/book at 0.9 times provides support, we would wait for some improvement in end demand in Europe before stepping in," the JP Morgan note to clients said.
Research: JP Morgan
CMP: Rs 156
Target price: Rs 155
JP Morgan has retained its ���neutral��� rating on Tata Steel with a price target of Rs 155, citing bleak outlook on the sector.
"With European steel environment remaining challenging, end demand visibility low, term debt at $10 billion and FY10 (estimated) adjusted net debt equity at 2.3 times, we remain ���neutral��� on the stock. Working capital release at Corus and the company���s intention to pre pay $450 million of debt at Corus from asset sales at Teesside are key positives. While adjusted FY10E price/book at 0.9 times provides support, we would wait for some improvement in end demand in Europe before stepping in," the JP Morgan note to clients said.
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