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The revised price target implies a further 13% downside from Wednesday’s closing levels for Tata Motors shares, which have already corrected 36% from their peak of ₹1,179.
Jefferies has downgraded Tata Motors after three-and-a-half years of remaining bullish on the stock as JLR faces weak demand in China and Europe, along with rising customer acquisition costs and higher warranty expenses.
It further said that a slowdown in demand for both commercial and passenger vehicles, along with rising competition in the electric vehicles space act as added headwinds for the stock.
Although Jefferies is anticipating a seasonally better fourth quarter for Tata Motors, it has cut its estimates for financial year 2025-2027 by 7% and 11% and Earnings per Share (EPS) estimates by 5% to 10% over the same timeframe.
Jefferies’ price target of ₹660 is also the lowest on the street for Tata Motors.
Tata Motors reported December quarter results after market hours on Wednesday, January 29, which were a miss on expectations. However, the management said that JLR is on course to meet its margin and cash flow guidance for the full year.
UBS said that the company’s commentary for the fourth quarter is ambitious amidst an uncertain financial year 2026 and 2027. It said that China recovery is the key for JLR to deliver 10% EBIT margin in the next financial year.
UBS has a “sell” rating on Tata Motors with a price target of ₹760.
Morgan Stanley remains “equal-weight” on the stock with a price target of ₹853.
It said that numbers were weaker than anticipated and that JLR will have a relook at its financial year 2026 guidance post the fourth quarter results.
CLSA though, has retained its “outperform” rating on the stock with a price target of ₹930. It said that the outlook for a strong fourth quarter remains intact but weak demand in China and higher costs remain near-term headwinds.
The brokerage has cut its financial year 2026 volume estimates for JLR by 5% to factor in the weak demand from the European Union and China.
Shares of Tata Motors had ended 3.6% higher on Wednesday, at the day’s high of ₹754.65, ahead of the results announcement.
First Published: Jan 30, 2025 7:59 AM IST
