Why This Large Cap PSU Stock Is Flying 4% Today Even As Benchmark Indices Crash

  • Benzinga India
  • Stock Market News
Why This Large Cap PSU Stock Is Flying 4% Today Even As Benchmark Indices Crash
Credit: © Reuters.

Benzinga - ONGC’s share price was soaring on Monday morning even as the broader market was collapsing due to the rising tension in the Middle East.

What Happened: The massive surge today comes as Jefferies initiated a “buy” call on the stock with a target price of ₹390, around 47% upside from the stock’s last closing price of ₹265.70.

In its latest research note, Jefferies said that the oil major’s stock is currently trading at a steep discount to Nifty compared to its long-term average. “The current valuation does not adequately reflect its intrinsic value,” Jefferies commented.

The brokerage firm is optimistic about ONGC’s future, anticipating strong free cash flows and a reduction in consolidated net debt over the FY24-26 period. This, in turn, is expected to drive profitable growth for the government-owned company.

However, the analyst pointed out that ONGC (NS: ONGC ) faces potential risks associated with sharp fluctuations in crude prices, either upward or downward. The research firm added that changes in crude and gas pricing have had a notable impact on ONGC’s profitability historically.

Price Action: ONGC’s share price was up 4.25% to trade at ₹277 in early trade on Monday.

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