ITC Ltd shares have lost momentum in the recent month. The stock has fallen 13% this month, compared to the Sensex's 2% decline. In nearly two years, the FMCG stock climbed out of its defensive zone and returned a remarkable 121%. ITC shares rose from Rs 213.95 on February 25, 2022 to Rs 473.95 on January 5, this year, more than tripling investor wealth.
However, the surge has lost momentum after January 15. In reality, the FMCG stock has given negative returns of 13% in 2024, with one-year returns dropping to 6.20% on the BSE.
In the current session, the ITC shares lost more than 1% intraday to Rs 404.35. Total 6.80 lakh shares of the FMCG firm changed hands, resulting in a transaction of Rs 27.76 crore. The firm's market capitalization declined to Rs 5.06 lakh billion. The stock reached an all-time high of Rs 499.60 on July 24, 2023, and plummeted to a 52-week low of Rs 369.70 on March 17, 2023.
ITC stock has a one-year beta of 0.4, showing modest volatility during the period.
In terms of technicals, ITC's relative strength index (RSI) is 27.4, indicating that the stock is oversold. ITC shares are trading below the 5-day, 20-day, 50-day, 100-day, and 200-day moving averages.
Jefferies has changed its rating on ITC shares from 'buy' to 'hold.' The brokerage anticipates that the firm will endure a period of stability without major volatility. It has lowered the target price for ITC shares from Rs 520 to Rs 430.
Due to the overhang, there is a reduction in the target multiple for the tobacco company to 18 times from 25 times. The brokerage company downgraded ITC to Hold, with a lowered price objective of Rs 430 (down from Rs 520 before).
Commenting on the stock's technical outlook, Avdhut Bagkar, Derivatives & Technical Analyst at StoxBox, stated, "ITC had seen extensive selling pressure following a breach of the 200-day moving average (DMA), steering a negative bias. While the stock has entered oversold territory, the price remains under selling pressure. The trend appears to be falling toward the 380 level. On the upside, the barriers of Rs 430 and Rs 445 moderate the positive trend."
Religare Broking has set a target price of Rs 385 for the ITC shares. You can set a stop loss of Rs 418.
"ITC has been under selling pressure for more than a month, with volumes gradually increasing. It has witnessed a significant breakdown from the protracted consolidation zone, with a noticeable increase in volumes," said Religare Broking.
Centrum Broking has a buy recommendation on the stock, with a target price of Rs574. However, the brokerage identified important dangers to the conglomerate's growth, including a dramatic increase in taxation, increased leaf tobacco prices, and a delayed economic recovery.
"Key positives include strategy refresh, steady taxes for the tobacco industry, tailwinds for the FMCG industry, the use of data analytics, expanding distribution, and cost optimization through supply chain interventions and smart manufacturing. However, we believe that digital transformation and operational leverage will have an impact on margins. We continue the BUY rating, with a DCF-based target price of Rs 574 (28.4 times Sept'26E EPS)," said the brokerage.
