Morgan Stanley has downgraded the stock to underweight from overweight and cut target price to Rs 2,250 from Rs 5,000 per share.
Jubilant FoodWorks
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Jubilant FoodWorks share price was locked at 10 percent lower circuit in the early trade on March 14 following news of resignation of the company’s CEO and whole-time director Pratik Rashmikant Pota.
There were pending sell orders of 9,001 shares, with no buyers available.
“The board of directors of Jubilant FoodWorks in their meeting held on March 11, 2022, accepted the resignation of Pratik Rashmikant Pota as the CEO and whole-time director of the company as he wishes to pursue opportunities outside Jubilant FoodWorks,” the company said in a statement. Pota will continue in his current role till June 15.
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Here are the brokerages view on stock and company post CEO resignation:
Credit Suisse
Research house Credit Suisse has kept the ‘neutral’ rating on the stock and cut the target price to Rs 2,900 from Rs 3,500 per share. It also lowered the target multiple to 55x.
“The CEO resignation is a setback and leadership change during challenging macro environment will be an overhang,” it said.
Morgan Stanley
The brokerage firm has downgraded the stock to ‘underweight’ from ‘overweight’ and cut the target price to Rs 2,250 from Rs 5,000 per share.
After the CEO departs, the strategy is in question, it said.
Morgan Stanley has cut FY23/24 EPS estimates by 15 percent/24 percent.
“The company is still well positioned to play long-term growth story in organised food but sudden leadership change threatens near-term outlook,” it said.
JPMorgan
JPMorgan has downgraded the stock to ‘neutral’ from ‘overweight’ on rising demand/margin risks.
It has cut the target price to Rs 3,000 from Rs 4,025 per share and lower FY23/24 EPS estimates by 11 percent/8 percent largely on back of margin cuts.
According to the broking firm, the unexpected CEO resignation adds to the uncertainty.
However, it continue to believe in mid-to long-term story of the company.
Macquarie
The research house has downgraded the stock to ‘underperform’ and cut the target to Rs 2,150 from Rs 3,550 per share.
The weaker-than-industry sales/store performance to come under further pressure. However, resignation of CEO raises concerns around execution and earnings growth. It has cut the FY22/23/24 EPS estimates by 3 percent/13 percent/15 percent.
At 9:17am, Jubilant Foodworks was quoting at Rs 2,577.70, down Rs 286.40, or 10 percent on the BSE.
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