Metals Made Comeback In Today's Trading Session, But What Are Brokerages Saying About Metal Stocks?

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After a horrific decline yesterday, metals made a comeback in today’s trading session. However, despite the comeback, Nifty Metal is still the most underperforming index quarter to date. J P Morgan has maintained an overweight rating on Vedanta with a target price of Rs 499/share. J P Morgan believes Vedanta’s 15% fall on copper smelter sale news flow yesterday is excessive. Copper smelter sell-off would be a positive, in J P Morgan’s view. Their earnings estimates do not assume any EBITDA smelter. Also note, that LME aluminum prices are back to 1QFY22 levels. CITI says they are taking a relook at their earnings estimates for Tata Steel. They have cut their EBITDA by 33% on lower realizations. Cut on following the weakness in China’s export prices. Tata Steel P/B valuations at 0.8x aren’t too far from 1SD below the mean (0.7x) while the stock may not hit the 2020 trough of 0.5x given expectations of a China stimulus, CITI says in its report. They remain buyers with a medium-term view, Target at `1,085/share.

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