New Delhi: Titan Company's stock dropped by almost 4 percent on July 8 after JPMorgan downgraded it from an 'overweight' to a 'neutral' rating following the release of its business update for the June quarter. The global brokerage firm also lowered its price target for Titan from Rs 3,850 to Rs 3,450.
JPMorgan reported that Titan's jewellery business experienced a 9 percent increase in revenue in the June quarter, which was below the reduced projections. This follows eight quarters in a row of meeting or surpassing expectations.
Titan stated that the combination of expensive gold and fewer wedding occasions led to decreased consumer interest, ultimately affecting overall growth.
Analysts at JPMorgan believe that the high volatility of gold prices may affect short-term demand, but they are more worried about the slowdown in studded jewellery growth due to consumers' preference for gold and increased promotional activity, which could slow down Titan's new customer acquisition.
JPMorgan stated that if the factors mentioned continue, Titan's profit margins may be negatively impacted. As a result, they have decreased their forecast for Titan's Earnings Per Share (EPS) for FY25-27 by 5-6 percent.
CLSA reiterated its positive "outperform" rating on Titan and set a price target of Rs 4,045. CLSA believes that any decline due to a "rare soft result" should be viewed as a chance to "accumulate", as the brokerage anticipates growth to resume with the normalization of gold prices and the return of wedding season.
Meanwhile, Goldman Sachs also labeled Titan's quarterly update as "disappointing". Nevertheless, the brokerage reiterated its "buy" advice for the stock with a target price of Rs 3,700.
During the quarter, the competition outperformed Titan, causing worry, according to the brokerage, which also mentioned that pressure is expected on its jewellery margins.
Titan Company's stock dropped by almost 4 percent on July 8 after JPMorgan downgraded it from an 'overweight' to a 'neutral' rating following the release of its business update for the June quarter. The global brokerage firm also lowered its price target for Titan from Rs 3,850 to Rs 3,450.
JPMorgan reported that Titan's jewellery business experienced a 9 percent increase in revenue in the June quarter, which was below the reduced projections. This follows eight quarters in a row of meeting or surpassing expectations. Titan stated that the combination of expensive gold and fewer wedding occasions led to decreased consumer interest, ultimately affecting overall growth.
Analysts at JPMorgan believe that the high volatility of gold prices may affect short-term demand, but they are more worried about the slowdown in studded jewellery growth due to consumers' preference for gold and increased promotional activity, which could slow down Titan's new customer acquisition. JPMorgan stated that if the factors mentioned continue, Titan's profit margins may be negatively impacted. As a result, they have decreased their forecast for Titan's Earnings Per Share (EPS) for FY25-27 by 5-6 percent.
CLSA reiterated its positive "outperform" rating on Titan and set a price target of Rs 4,045. CLSA believes that any decline due to a "rare soft result" should be viewed as a chance to "accumulate", as the brokerage anticipates growth to resume with the normalization of gold prices and the return of wedding season. Meanwhile, Goldman Sachs also labeled Titan's quarterly update as "disappointing". Nevertheless, the brokerage reiterated its "buy" advice for the stock with a target price of Rs 3,700.
During the quarter, the competition outperformed Titan, causing worry, according to the brokerage, which also mentioned that pressure is expected on its jewellery margins.
Goldman anticipates that Titan may reach its FY25 guidance, but is expected to fall towards the lower end of the range. Morgan Stanley predicts that Titan's profit margins for jewellery will face challenges, yet it still maintains a neutral rating on the stock with a target price of Rs 3,526.
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