Breakout stock: Zomato share price sees range breakout; analysts expect up to 18% upside

Zomato share price hit its record high level of ₹286.50 apiece in early deals on Friday, extending gains for the seventh straight session. However, Zomato shares cooled off from the high levels and declined over 2%.

Zomato stock price has rallied over 7% in one week and has surged more than 50% in the past three months. The stock has witnessed a technical breakout above the consolidation zone and analysts expect the medium-term uptrend in Zomato shares will continue.

“Zomato exhibited a strong breakout above the consolidation zone between ₹280 - 249, marked by a decisive bullish candle on the weekly chart, reinforcing the continuation of the medium-term uptrend. The stock forms a pattern of higher high-low formations on a weekly chart while maintaining position above a medium-term upward sloping trendline, suggesting a sustained uptrend,” Axis Securities said.

According to the technicals, Zomato stock is holding above the 23% Fibonacci retracement level of the rally from ₹146 to ₹279, with support forming around ₹249, indicating a potential medium-term support zone.

“The weekly Relative Strength Index (RSI) crossed above its reference line, generating a buy signal. Following the consolidation breakout, the stock is expected to continue medium term uptrend, with targets set at ₹314 - 325,” said the brokerage firm.

Axis Securities recommends buying Zomato shares in the range of ₹278 - 272, with a target price of ₹314 - 325, expecting gains of 14% - 18%. As per the analysis, a trend reversal can be seen below ₹256 level.

Zomato Target Price

Foreign brokerage firm Bernstein has reaffirmed its ‘Outperform’ rating and raised Zomato share price target to ₹330 apiece from ₹275 earlier, implying an upside of more than 16% from Thursday’s closing price.

Bernstein’s positive view on Zomato comes on the back of the growing quick commerce (QC) sector and the brokerage firm notes that Zomato is central to the quick commerce boom. It believes Zomato is prioritizing long-term growth and market leadership over immediate profitability.

Zomato share price has given multibagger return of 125% year-to-date (YTD) and more than 183% in one year. 

At 11:25 am, Zomato shares were trading 2.11% lower at ₹277.90 apiece on the BSE.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.