Tata Motors Ltd. surprised analysts with Jaguar Land Rover’s operating margin expansion in the last quarter of financial year 2016-17. Ten out of twelve analysts tracked by Bloomberg have maintained a ‘Buy’, ‘Overweight’ or ‘Outperform’ rating. Only CLSA has retained a ‘Sell’ rating on the stock.
Most analysts are also bullish on the company regaining market share in India, specially in the commercial vehicles space and the management commentary on Jaguar Land Rover’s volumes.
Morgan Stanley On Tata Motors
- Maintains ‘Overweight’ with price target of Rs 588 per share
- Company expects ‘solid’ JLR volumes growth in UK, China, Europe and U.S.
- Volumes to be driven by New Discovery and Velar
- Tata Motors’ India business to see market share gain in medium and heavy commercial vehicles
Bank Of America Merrill Lynch On Tata Motors
- Retains ‘Buy’ rating with price target of Rs 600 per share
- Sharp improvement in JLR’s margins
- Robust volumes growth leading to improving operating leverage
- Range Rover Velar will have lower incentives and improve product mix
CLSA On Tata Motors
- Retains ‘Sell’ with price target of Rs 405 per share
- Jaguar Land Rover margins are strong but management commentary remains weak
- Management sees no change in medium term EBIT margins
- India business continues to languish in loss making territory
- Stock looks expensive at 16 time FY18 PE