Analysts Upgrade Higher Valuation Stocks Amid Volatility
Sell-side analysts upgraded their target prices for stocks trading at a higher valuation in September amid a surge in volatility in the market.
Target prices were upgraded for one-third of the 439 stocks tracked by at least five analysts, according to Bloomberg data. Analysts lowered forecast for over 36 percent of the stocks, while estimates for 30 percent remained unchanged. The price-to-earnings multiple for the Nifty 50 Index fell by over 200 basis points in September to 22.3 times, the data showed.
The India Volatility Index jumped more than a third last month as all but one sector—technology—offered negative returns. The NSE Nifty 50 Index fell over 6 percent last month—the worst September since the Lehman Brothers Crisis of 2008.
The small- and mid-cap indices lost 20 percent and 14 percent, respectively, during the period, Bloomberg data showed. The Nifty Realty Index was the worst performer, losing a little over 20 percent. Only the Nifty IT Index bucked the trend with marginal gains.
Here’s how analysts revised their target prices based on valuation: