ITC surges 5% on reports of potential investment from an e-commerce titan
- Shares of consumer products company ITC surged as much as 5% on Thursday hitting its 52-week high at ₹261.80.
- The company’s stock is known for its massive underperformance over the years as in the last five years ITC has gained just 7% while benchmark index
Sensexwent up 120%.
- Analysts believe the stock deserves better valuation following its poor stock performance over the years.
Media reports indicate that e-commerce giant Amazon is planning to invest in ITC’s e-Choupal and this seems to have triggered the stock on Thursday. Shares of the company have gained as much as 5% hitting its 52-week high at ₹261.80 on October 14.
Farmers use e-Choupal to order seeds, fertilisers and aquaculture products like soybeans, wheat, coffee, and prawns from ITC or its partners at prices lower than those available from village traders.
Shares of ITC have gained 19% in the last one month, thanks to the rally in stock from September 16.
A believe that the company’s cigarette business will fully recover with the aggressive vaccination drive and reduction in COVID-19 cases.
“Overall, we expect ITC to see strong acceleration in earning growth led by the cigarette business. Earnings per share growth is likely to be in double-digits in both FY22 and FY23, reportedly said analysts at Jefferies while recommending a “BUY” rating on the stock with a target price of ₹300.
AdvertisementICICIdirect has set a target price of ₹260 on the stock as it stated that the stock witnessed noteworthy delivery volume activity in September.
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