Stories
ITC Shares Surge Nearly 5 Percent After Citi Upgrades Stock to Buy Following Major Correction
- •ITC shares rose nearly 5 percent on Monday after Citi upgraded the stock from Sell to Buy and raised its target price to ₹300.
- •Citi noted that the stock's 34 percent year-to-date correction has already priced in potential risks regarding cigarette tax hikes.
- •The brokerage believes the earnings downgrade cycle is largely over and the current valuation offers an improving risk-reward profile.
- •Cigarette profitability is expected to improve sequentially through FY27 despite near-term volume pressure from higher prices.
- •Bloomberg data shows ITC holds a consensus Buy rating from analysts with a 12-month target price implying further upside.
Key Questions Answered
Citi upgraded ITC shares to Buy from Sell and raised its target price to ₹300 from ₹280. This upgrade reflects the belief that ITC's earnings downgrade cycle is largely over and that the stock's 34% year-to-date correction has already priced in risks regarding potential cigarette tax hikes.
According to Bloomberg analyst-rating data, ITC maintains a consensus Buy rating with 21 out of 38 analysts recommending a Buy, 15 on Hold, and two on Sell. The 12-month consensus target price stands at ₹326.03, pointing to an approximate 21% upside from its current price.
Citi estimates that roughly 75% of tax increases have been passed on via price hikes, expecting calibrated pricing actions to support cigarette profitability despite near-term volume pressures from higher consumption costs. While new product launches help retain consumers, risks such as illicit cigarette competition remain.
