ITC shares on a record run this week; do price targets suggest more upside?

Shares of ITC are on a winning run this week. The stock, which rose in the last three sessions hit a record high today. ITC stock gained 1.17% to a fresh high of Rs 519.50 on BSE. With today’s rally, the FMCG stock has gained 30% from its 52-week low of Rs 399.30 hit on March 12, 2024. Later, the ITC stock ended 0.16% higher at Rs 514.25 against the previous close of Rs 513.45. Total 3.92 lakh shares of the FMCG firm changed hands amounting to a turnover of Rs 20.24 crore. Market cap of the firm climbed to Rs 6.43 lakh crore.

Jigar S Patel, Senior Manager - Technical Research Analyst, Anand Rathi Shares and Stock Brokers has advised investors to adopt a cautious approach toward the FMCG stock.

“ITC has been consolidating in a range between Rs 495 and Rs 515 for the past few sessions, reflecting a phase of price stabilization after previous movements. The daily RSI has not yet climbed above the 70 zone, which would indicate strong overbought conditions and signal increased bullish momentum. Since the RSI remains below this level, that suggests that the stock may still lack the necessary buying strength to break decisively out of its consolidation phase. For those who have already bought ITC, it is advisable to monitor the breakout level closely. For new positions, it would be prudent to wait for a confirmed breakout above Rs 515 on a daily closing basis. A daily close above this level could signal a fresh bullish trend and offer a better entry point for long positions,” said Patel.

International brokerage Jefferies has a buy call on the ITC stock with a price target of Rs 585.

The brokerage expects ITC's FMCG revenue to accelerate in financial year 2025, while expecting its Earnings Per Share (EPS) to grow at a Compounded Annual Growth Rate (CAGR) of 10%.

Jefferies said that this is lower than its peers, it is reasonable. ITC's valuations are in-line with its pre-Covid history.

 Brokerage Deven Choksey Research has an accumulate rating on the stock with a price target of Rs 545.

"ITC's strong performance across sectors includes effective management in cigarettes, FMCG growth via new channels, and robust hotel expansion. Challenges in paper and packaging and rising agri costs were mitigated by strategic initiatives. The company expects increased consumption with improved economic conditions," the brokerage said.

ITC stock has a one-year beta of 0.6, indicating low volatility during the period. In terms of technicals, the relative strength index (RSI) of ITC stock stands at 62.1, signaling it's trading neither in the oversold nor in the overbought zone. ITC shares are trading higher than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day and 200 day moving averages.