Trent Poised For Further Rally Despite 150% Jump This Year, Citi Says Initiating Coverage
Citi added Trent in its Pan-Asia high-conviction focus list in addition to ranking it a top pick in India consumer discretionary and retail coverage.
The value-for-money retailer Trent Ltd. is likely to rally another 21% after outperforming its peers, Citi Research projects. The stock still has steam left despite a 150% rally in the year so far, as per the brokerage, which initiated coverage on it with a 'buy' rating.
The brokerage expects the Tata Group company's scrip to rise to Rs 9,250 per share, implying a 21.5% upside from the previous close. This is the highest target set by any analyst tracking the company, according to Bloomberg.
The Mumbai- based company's transformation from a single-format retailer to a multi-format and multi-category player led to higher revenue growth against its retail peers.
Trent has outpaced its peers and driven Street upgrades despite weak consumer sentiment, a slowdown in discretionary spending, and downgrades for most other consumer stocks, Citi said.
Zudio—a clothing and accessories brand—is piloting more formats to add two or three more growth engines. Star—grocery platform run by the company—is already showing turnaround signs, Citi said. Such other brands in different formats also have the potential to ramp up in the medium term and drive further upside, the brokerage said.
Citi added Trent in its pan-Asia high-conviction focus list in addition to ranking it a top pick in India consumer discretionary and retail coverage.
Trent shares have risen 254% during the last 12 months and advanced by 150% on a year-to-date basis. The relative strength index was at 77.
Thirteen out of the 21 analysts tracking the company have a 'buy' rating on the stock, four suggest a 'hold' and another four have a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential downside of 14%.
