Tata Steel Share Price Soars as JP Morgan Raises Target – Should You Invest?
Tata Steel shares surged by 1.54% on Thursday after JP Morgan raised the stock’s target price while maintaining an ‘overweight’ rating. This positive momentum has sparked investor interest, with the stock climbing over 11.23% in the past month.
JP Morgan’s Optimism on the company
At 9:25 AM, Tata Steel stock was trading at ₹152.85 per share on the National Stock Exchange (NSE). JP Morgan has now set a new target price of ₹180, indicating a potential upside of over 20% from current levels.
One of the key drivers behind JP Morgan’s bullish outlook is strong earnings potential in Tata Steel’s European operations. The firm highlighted several catalysts, including:
✔️ Germany’s infrastructure fund announcement
✔️ A sharp increase in European steel spreads
✔️ Positive investor sentiment following marketing events in Hong Kong and Singapore
Despite these developments, JP Morgan believes some investors haven’t fully factored in these positives into their outlook for the stock.
the company’s European Business on Path to Profitability
European steel spreads have seen a significant 18% rise quarter-on-quarter and over 60% increase on a spot basis compared to the Q3 average. However, current market estimates do not yet account for this strong recovery.
JP Morgan expects the company’s European operations to break even in terms of EBITDA by the first quarter of FY26. The brokerage has raised its EBITDA per tonne (EBITDA/t) estimates for Tata Steel Europe in:
📌 FY26: $68 per tonne (up from $19 per tonne)
📌 FY27: $70 per tonne (up from $27 per tonne)
These upward revisions have led JP Morgan to increase overall EBITDA estimates for FY26 and FY27 by 8-11%.
Tata Steel’s Position in the Market
Tata Steel’s market capitalization now stands at approximately ₹2 lakh crore, making up 6.9% of the total market cap of the Tata Group.
Interestingly, Tata Steel is one of only three Tata Group stocks that have delivered positive returns this year. The other two are:
✅ Benares Hotels – up 47%
✅ Tata Consumer Products – up over 4%
Key Financial Metrics of Tata Steel
| Metric | Value |
|---|---|
| Market Cap | ₹1,88,501 Cr. |
| Current Price | ₹151 |
| 52-Week High/Low | ₹185 / ₹123 |
| Stock P/E | 66.6 |
| Book Value | ₹72.2 |
| Dividend Yield | 2.38% |
| ROCE (Return on Capital Employed) | 7.02% |
| ROE (Return on Equity) | 6.55% |
| Debt-to-Equity Ratio | 1.10 |
| Promoter Holding | 33.2% |
| Pledged Percentage | 0.00% |
| Industry PE | 16.8 |
| EPS (Earnings Per Share) | ₹2.19 |
| Free Cash Flow (3Yrs) | ₹44,866 Cr. |
| Free Cash Flow (5Yrs) | ₹92,815 Cr. |
| Debt | ₹99,392 Cr. |
| Price to Book Value | 2.09 |
| RSI (Relative Strength Index) | 69.0 |
| Intrinsic Value | ₹46.7 |
| Graham Number | ₹59.6 |
Should You Buy Tata Steel Stock?
While Tata Steel has strong fundamentals and a positive outlook, investors must consider:
📌 Debt Levels – ₹99,392 Cr. debt remains a concern.
📌 Stock Valuation – With a Stock P/E of 66.6, it trades above the industry average.
📌 Industry Cycles – Steel prices and global demand fluctuations can impact margins.
However, if you believe in long-term growth potential, JP Morgan’s ₹180 target offers a 20% potential upside.
Frequently Asked Questions (FAQs)
❓ Why did Tata Steel’s share price rise today?
📌 Tata Steel’s stock surged after JP Morgan raised its target price to ₹180, citing strong European steel spreads and positive market catalysts.
❓ What is the new target price of Tata Steel set by JP Morgan?
📌 JP Morgan has increased its 12-month target price to ₹180 per share, suggesting a 20% upside from current levels.
❓ Is Tata Steel’s European business profitable?
📌 Not yet, but JP Morgan expects it to break even by Q1 FY26, thanks to rising European steel spreads and infrastructure investment.
❓ What is Tata Steel’s market capitalization?
📌 The company’s market cap is approximately ₹1,88,501 Cr., accounting for 6.9% of the Tata Group’s total market cap.
❓ Should I invest in Tata Steel?
📌 It depends on your investment horizon. Tata Steel has high debt but also strong growth prospects. If you believe in the long-term potential of the steel industry, the 20% upside indicated by JP Morgan may be appealing.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.