Shares of Eicher Motors, owner of the Royal Enfield (RE) brand, recorded a sharp rise during the previous trading session on Wednesday. The stock settled with 4.21 per cent gains at Rs 3,874.70 on BSE. At this price, the scrip was down 7.78 per cent from its all-time high of Rs 4,201.70, a level seen on December 4 last year. Although, the counter has gained 32.05 per cent in the past one year.
Analysts at UBS has upgraded the counter to 'Buy' from 'Neutral' and raised its one-year target price to Rs 5,000 from earlier Rs 4,300.
"We expect RE's upcoming 450cc platform launch to address competition and growth concerns. The new launch cycle is strong for the next two years and we are optimistic about the 450 roadster launch," the global brokerage stated. UBS also underscored that the launch of Hunter 450 -- considering the strong success of the Hunter 350 -- could succeed as well.
"We find the risk-reward compelling, especially since RE remains insulated from electrification risk. We forecast an 18 per cent EBITDA CAGR in FY24-26," it further said.
Technical view on Eicher Motors
The stock looked strong on daily charts and one can consider buying around Rs 3,850 levels for an upside target of Rs 4,200, said Ravi Singh, Senior Vice-President at Religare Broking. Keep stop loss placed at Rs 3,750, he added.
"For Eicher shares, the Rs 3,800-3,720 zone is likely to cushion any short-term blip, with sacrosanct support at around Rs 3,620. On the higher end, a decisive move beyond Rs 3,960-4,000 levels can only bring the mojo back into the counter," said Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.
AR Ramachandran from Tips2trades also suggested that the stock looked 'bullish' with strong support at Rs 3,717. And, a daily close above its resistance level of Rs 4,019 could lead to a upward target of Rs 4,200 in the near term, he said.
"Support will be at Rs 3,800 and resistance at Rs 4,000. A decisive close above Rs 4,000 level may trigger a further upside till Rs 4,150. Expected trading range will be between Rs 3,700 and Rs 4,200 for a month," said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers.
Eicher Motors' counter traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The stock's 14-day relative strength index (RSI) came at 54.87. A level below 30 is defined as oversold while a value above 70 is considered overbought.
As of December 2023, promoters held a 49.15 per cent stake in the automotive company.