BofA downgrades Hero MotoCorp; cuts target price
Reuters Market Eye - Bank of America Merrill Lynch downgrades Hero MotoCorp(HROM.NS) to "underperform" from "buy" and cuts its target price to 1,650 rupees from 1,980 rupees.
The bank expects the company's domestic sales to remain muted and in 'single digits.' This is primarily due to heavy dependence on 100cc bikes where better options are available with competitors, and likely structural shift to 150cc plus premium bikes where the "company's franchise is weak".
"We cut our export assumptions by 40 percent/year to factor in the six-month delay in its overseas foray," BofA said in a note.
It expects Hero MotoCorp's margin expansion to be muted, cuts EBITDA margin assumptions by 70bp/year to 11.4/13.1 percent to factor peer pressures, and rupee weakness that will hurt imports.
At 10:57 a.m., shares were down 0.78 percent at 1,807 rupees.
- Tweet this
- Share this
- Digg this
- UPDATE 2-U.S. fast-food workers rally for higher minimum wage
- Springsteen's handwritten 'Born to Run' draft fetches $197,000
- South Africa, world mourn 'giant for justice' Nelson Mandela
- UPDATE 4-Child killed in Idaho school bus accident, 4 more hurt
- Delhi's rubble-strewn Connaught Place mirrors Congress' election struggle
South African anti-apartheid hero Nelson Mandela died peacefully at home at the age of 95 after months fighting a lung infection, leaving his nation and the world in mourning for a man revered as a moral giant. Article | Obituary - President and unifier