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Momentum Pick: Sector outperformer SBI all set for further upside, say analysts - recommend buy on decline
The stocks of SBI have been hitting new highs and attained most targets previously recommended by many analysts.
Index heavyweight and PSU Bank stock State Bank of India (SBI) has outperformed the BSE Sensex by over 109 per cent, returning almost 160 per cent on the investments over a 1-year period. The year-to-date (YTD) returns are at 92 per cent. It has also trumped the sector by 21 per cent. On Wednesday, the largest public sector lender announced its September quarter results and reported a 67 per cent jump in its net profits at Rs 7626.6 cr.
The stocks of SBI have been hitting new highs and attained most targets previously recommended by many analysts. On Wednesday, the stock ended at Rs 527.65 on the BSE, up by 1.14 per cent. On an intraday basis, it hit its 52-week high of Rs 542.2.
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What should be your strategy for this stock? Should you buy this stock at current levels? Here is what the analysts say!
The SBI shares are currently trading at a Price-to-Earnings (PE) ratio of 20.72 while the Price-to-Book value is at Rs 1.8. Punjab National Bank (PNB) is available at a PE multiple of 14.15, Canara Bank at 9.72 while Bank of Baroda (BOB) at 27.99. Meanwhile, its private peer HDFC Bank which is also the largest in terms of market capitalization is available at a PE multiple of 26.15.
The stock has risen for 4 consecutive trading sessions till Wednesday and has risen by 5.24 per cent. It has been trading above its 5-day, 20-day, 50-day, 100-day and 200-day moving averages.
Fundamental View – Sandeep Jain: Buy on Decline| LTP: Rs 527.65| Target: Rs 650| View: 6-9 months| Upside 25%
Market expert and Tradeswift Director Sandeep Jain is bullish on this stock and recommends a buy on the decline in this stock. Jain said that the stock has moved considerably and valuations are slightly on a higher side. The stock was trading at levels around Rs 300 around the Budget time, he added.
He, however, maintained that the long term prospects are strong for SBI shares.
He estimates the share to test levels of Rs 650.
It will continue to outperform alongside the private bank stocks, he further said.
Technical View – Sumeet Bagadia: Buy on Decline| LTP: Rs 527.65| Target: Rs 575| 9% Upside
Analyst Sumeet Bagadia also recommended a buy in this stock. He sees resistance around Rs 540 and estimates SBI shares to test levels between Rs 560- Rs 575 over the short term period once the hurdle is breached.
Bagadia said that the stock is placed strongly on the technical charts.
Technical View – Nilesh Jain:Hold| LTP: Rs 527.65| Target: Rs 600| 14% Upside
Analyst Nilesh Jain is also bullish on this stock and expects a target price of Rs 550 over a short term period and Rs 600 in the long term.
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