ITC shares fall after turning ex-dividend. Good level to buy now?

ITC share price has been under the sell-off heat after announcement of final dividend of ₹6.25 per share for the financial year 2021-22. ITC share price today opened with a downside gap of around ₹4.50 per share and went on to hit intraday low of ₹263.85 apiece levels, logging near 2.75 per cent dip in early morning deals. In last one week, ITC shares have fallen from around ₹281 to ₹265, descending near 5.50 per cent in this period. However, stock market experts are seeing this dip as an opportunity to buy and accumulate ITC shares for long term. They are expecting this dividend paying stock to go up to ₹340 per share levels in next 12 months.

Speaking on ITC share price outlook, Ravi Singhal, Vice Chairman at GCL Securities said, "ITC is a diversified company which has remained sideways for long due to Covid restrictions. However, the unlock theme is going to push this stock now and the stock has given signs of coming out of consolidation after giving breakout above ₹252 levels on closing basis in recent sessions. So, one should accumulate ITC shares maintaining stop loss at ₹244 for 12 months target of ₹320 to ₹340 levels."

For fresh investors who want to buy ITC for long term, Ravi Singhal of GCL Securities said, "One can buy ITC shares at current levels maintaining stop loss at ₹244 for 12-month target of ₹320 to ₹340 apiece levels."

Advising positional investors to buy and hold ITC stocks for long term, Santosh Meena, Head of Research at Swastika Investmart said, “The undemanding valuation, defensive nature of the business, and wide economic moats make this stock a good investment in the long term to enjoy inflation-beating returns.”

However, Edelweiss Wealth believes that ITC share price may go up to ₹450 levels in long-term as the stock has come out of the consolidation phase.

On fundamentals that may fuel ITC share price rally; the Edelweiss Wealth research report says, "We expect the volume in cigarettes to revive at a CAGR of 5 per cent during FY22–24E as against a CAGR of -1 per cent during FY11–21; FMCG’s EBITDA margin to scale up to higher single digits; and the hotel, paperboard and agri-commodities businesses to revive. This will lead to an earnings CAGR of 12 per cent in FY22–24E against a mere 7 per cent in the last five years."

On its suggestion to positional investors in regard to ITC shares, Edelweiss Wealth research report has recommended stock market investors to buy ITC shares at current levels for long term target of ₹450 maintaining stop loss at ₹220 apiece levels.

ITC shares have recently turned ex-dividend. Around a week ago, it informed about the recommendation of dividend citing, "The Board at the meeting held on 18th May, 2022 recommended Final Dividend of Rs. 6.25 per Ordinary Share of Re. 1/- each for the financial year ended 31st March, 2022, subject to declaration of the same by the Members at the 111th Annual General Meeting (AGM) of the Company convened for Wednesday, 20th July, 2022; the Final Dividend, if declared, will be paid between Friday, 22nd July, 2022 and Tuesday, 26th July, 2022 to those Members entitled thereto. The above Final Dividend is in addition to the Interim Dividend of Rs. 5.25 per Ordinary Share declared by the Board on 3rd February, 2022."

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.