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Business News/ Market / Stock-market-news/  Goldman Sachs asks investors to hop on to Royal Enfield maker’s shares
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Goldman Sachs asks investors to hop on to Royal Enfield maker’s shares

Eicher Motors shares, which have soared almost 8,000% in the past decade, have hit a sweet spot, says Goldman Sachs

Eicher Motors’s stock is down 16% from its 8 September record of Rs33,483.95 even as the broad market posted a fresh record. Photo: MintPremium
Eicher Motors’s stock is down 16% from its 8 September record of Rs33,483.95 even as the broad market posted a fresh record. Photo: Mint

Singapore: Shares of Eicher Motors Ltd, which have soared almost 8,000% in the past decade, have hit a sweet spot, says Goldman Sachs Group Inc.

The stock is down 16% from its 8 September record of Rs33,483.95 even as the broad market posted a fresh record. Eicher’s retreat has pushed down the valuation to below its five-year average and presents a buying opportunity, according to analyst Pramod Kumar.

While the street took Eicher’s sequentially flattish third-quarter sales as signs of demand saturation for Royal Enfield—a British wartime motorcycle brand—the moderation was mainly due to plant rejig and model year change, Kumar wrote in a 18 January note. He added the stock to regional conviction list with a target price of Rs35,208, implying a 26% gain from Friday’s close, when it had a market value of about $12 billion dollars.

Network expansion and new models will lead to Eicher’s revenue and operating profit compounding at 25% and 30% respectively, over the fiscal 2017-2020 period, according to the note.

Eicher Motors is the best-performing company on the NSE Nifty 50 Index over the past 10 years, and one of the gauge’s two members with a five-digit price tag on its shares. Bloomberg

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Published: 22 Jan 2018, 10:54 AM IST
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