Buy, Sell, Hold: Here are 4 stocks that analysts are tracking today

Analyst: Bank of America Merrill Lynch | Rating: Buy | Target: Rs 376

The research firm believes that ICICI Bank’s stock is pricing in stress and is trading at 1.2 times and 0.9 times FY18 and FY19, respectively and is a fully stress-adjusted book value. It also increased earnings per share (EPS) by over 1 percent for the current fiscal and the next one, while profit after tax (PAT) growth has been forecast at 17 percent in FY18 and 22 percent in FY19.

Analyst: Citi | Rating: Buy | Target: Rs 330

The global financial services firm said that the use of contingent provisions helped cushion the profit and loss (P&L) account, adding that 50 percent of NPL additions at Rs 11,300 crore came from one cement account. Going forward, asset resolution is the key to its CASA gains and liabilities.

Analyst: Deutsche Bank | Rating: Buy | Target: Rs 350.

Analysts the firm saw strong CASA growth aiding margins for the bank. Meanwhile, it cut earnings by 14 and 11 percent in FY18 and FY19, assuming higher credit costs. It observed that these costs have peaked and will remain elevated in FY18. Higher slippages from corporate books is also a key risk to the stock, it said.

Analyst: JPMorgan | Rating: Neutral | Target: Rs 265

JPMorgan termed ICICI Bank’s slippages as disappointing though they were largely from the drill-down list. It observed that headline growth was weak largely due to stressed book. Meanwhile, retail book bounced back to 7.5 percent quarter on quarter post demonetisation. Yields could be under pressure from price competition, base rate to MCLR transition.

Analyst: Goldman Sachs | Rating: Buy | Target: Rs 320

The research firm expects slippages to moderate in FY18 to 4 percent from 6.7 percent in FY17. It feels the stock is a buy on attractive risk reward. Having said that, higher corporate loan slippages and lower than expected margin are the key risks to the stock.

Analyst: IDFC Securities | Rating: Outperform | Target: Rs 315

The brokerage firm termed the earnings better than expected, especially on the CASA and new stress loan formation front. It cited how the management expects slippages and credit cost to decline in the current fiscal. However, it prefers Axis Bank and SBI in the sector.

Analyst: Macquarie | Rating: Outperform | Target: Rs 330

The firm believes that the current market price is adequately discounting asset quality woes of the bank. While slippages will be lower in FY18, they will still be high on absolute basis, Macquarie said in its report. However, margins from the March quarter surprised positively, but are unlikely to see material improvement in FY18, it said. Cheap valuations, lower slippages key catalysts for the stock going forward.

Marico

Analyst: Credit Suisse | Rating: Neutral | Target: Rs 300

Credit Suisse continues to fundamentally like its solid core portfolio of coconut oils. Having said that, it believes that Marico’s future growth drivers outside hair oils hold good potential over 5 years. Its valuations At over 43x FY18 leave no room for upside.

Analyst: Deutsche Bank | Rating: Buy | Target: Rs 340

Given the focus on volume and strong innovation pipeline, Deutsche Bank expects Marico’s valuation to sustain. Among key risks to the stock are rural slowdown and market share losses.

Analyst: JPMorgan | Rating: Neutral | Target: Rs 300

The brokerage believes that current valuations appear demanding. It revised FY18 and FY19 ERPS estimates by over 2 percent on factoring a better Q4. It expects coconut oil/VAHO to witness over 20 percent and 16 percent, respectively. Saffola is likely to post over 10 percent revenue growth, it added. Moreover, it expects youth portfolio to revive over 15 percent from subdued base in FY17.

Analyst: Goldman Sachs | Rating: Neutral | Target: Rs 262

Faster new product growth, commodity benefits are the key risks for the stock, it said. Meanwhile, slower hair oil sales, slower international growth are key risks.

Analyst: Macquarie | Rating: Outperform | Target: Rs 331

For Macquarie, Marico remains one of the top picks in the consumer space. It believes that strong earnings delivery should sustain the higher valuations. It feels that the Street is underestimating margin expansion on account of operating leverage.

Future Retail

Analyst: Nomura | Rating: Buy | Target: Rs 476

The brokerage house initiated coverage on the stock and sees 46.6 percent upside to the stock. This is on the back of projected earnings growth trajectory and better returns. It expects India’s modern retail share to reach 12 percent by FY20 against 9 percent currently. It expects Future Retail to be key beneficiary of growing modern retail share in India. Furthermore, it sees margin touching 4 percent by FY19 on better product mix and cost control.

DHFL

Analyst: Nomura | Rating: Buy | Target: Rs 335

Nomura said that the company’s Q4 results were in line with forecasts with marginal beat on margin and assets under management (AUM) growth. But, it highlighted the risk for housing finance companies with respect to mortgage growth, pressure on spreads in the core business as well.

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