Titan share price: Titan stock ruts 4% after JPMorgan downsize following powerless Q1 business update:
Titan reported that subdued consumer demand, influenced by high gold prices and fewer wedding occasions, has affected overall growth, as stated in its Q1 business update. The company highlighted these factors as significant contributors to the current market conditions.
In 2024, Titan’s stock has declined by 14%, contrasting sharply with the Nifty 50 index, which has risen approximately 11% during the same period. The drop in Titan Company’s shares accelerated by nearly 4% on July 8, following a downgrade from JPMorgan, shifting its rating from ‘overweight’ to ‘neutral’ after Titan’s June quarter business update. JPMorgan also revised down Titan’s target price to Rs 3,450 from Rs 3,850 previously.
During the June quarter, Titan’s jewellery business reported a 9% revenue growth, which fell short of reduced expectations, according to JPMorgan. This performance follows eight consecutive quarters of meeting or surpassing expectations. Titan attributed subdued consumer demand to high gold prices and fewer wedding occasions impacting overall growth.
Analysts at JPMorgan expressed concerns over short-term demand volatility due to high gold prices and highlighted moderating growth in studded jewellery amid rising consumer preference for gold and increased promotional activities, potentially slowing new customer acquisition for Titan.
JPMorgan highlighted concerns that if current factors persist, Titan’s profit margins could suffer. As a result, they have revised down their Earnings Per Share (EPS) estimate for FY25-27 by 5-6 percent.
On the other hand, CLSA reaffirmed its “outperform” rating on Titan with a price target of Rs 4,045. They view any market correction following what they term as a “rare soft result” as a buying opportunity. CLSA anticipates that growth will rebound once gold prices stabilize and wedding seasons resume.
Goldman Sachs, while calling Titan’s quarterly update disappointing, maintained its “buy” recommendation on the stock with a target price of Rs 3,700. They acknowledged that Titan faced tougher competition during the quarter, which could pressure its jewellery margins.
Similarly, Morgan Stanley kept an equalweight rating on Titan with a price target of Rs 3,526, echoing concerns about potential pressure on Titan’s jewellery margins.
At 10 am, Titan’s shares were trading at Rs 3,133.00 on the National Stock Exchange (NSE), marking a 4 percent decline. Year-to-date, the stock has decreased by 14 percent, contrasting with the Nifty 50 index, which has gained approximately 11 percent during the same period.
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