Steel Stocks to Remain Dented Through 2024: Morgan Stanley

However, the brokerage sees a scope for the steep downside in Jindal Steel and Power, and JSW Steel.

SEATTLE (Scrap Monster): Global brokerage firm Morgan Stanley has forecast another year of underperformance for steel stocks in 2024, citing weak global macros, sluggish demand on the face of higher domestic supply, and unattractive valuations as major drags for the sector.

The weak outlook for the steel sector comes after their sustained poor show in 2023.

Amid the expected weak trend for steel stocks in 2024, Morgan Stanley's price targets for four steelmakers also hint towards the scope of a downside in these counters.

The firm assigned an 'equal-weight' call to Tata Steel with a price target of Rs 120, which implies a downside potential of around 7 percent from Friday's closing level. In the same way, the price target of Rs 85 for Steel Authority of India reflects a downside potential of over 13 percent, despite an 'equal-weight' rating on the stock.

However, the brokerage sees a scope for the steep downside in Jindal Steel and Power, and JSW Steel. Likewise, the firm assigned a price target of Rs 525 for Jindal Steel and Power, which undermines the potential of an over 23 percent downside in the counter.

For JSW Steel, Morgan Stanley rolled out a price target of Rs 620, which coincides with an over 26 percent downside from Friday's close. The brokerage firm had an 'underweight' call on both the stocks.

Courtesy: www.moneycontrol.com

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