Trent Ltd. are in focus on Thursday, July 24, after brokerage firm Goldman Sachs downgraded its rating on the stock and cut its price target by 21%.Goldman Sachs has downgraded Trent to “neutral” from its earlier rating of “buy” rating and cut its target price from ₹6,970 apiece to ₹5,500 per share. This implies a potential upside of just 2.4% from Wednesday’s closing levels.
The brokerage has cut its financial year 2026 sales and Earnings Per Share estimates by 5% – 9% and 8% – 13%, respectively, to reflect higher-than-expected cannibalisation impact.
Cannibalisation refers to the reduction of sales of a company’s product as a consequence of the introduction of another similar product.
Goldman Sachs had originally estimated that Trent’s Zudio would have a 5% market share in India’s overall apparel market by financial year 2035. Zudio’s market share at the end of the previous financial year stood at 1.5%.While Zudio continues to grow faster than the apparel market, the pace of market share gains will likely be slower than expected, according to the Goldman Sachs note. Zudio’s sales growth estimate for FY25 were 60%.
Shares of Trent could continue to trade in a range around the current price levels, until there is a sign of inflection, Goldman Sachs said.
Of the 25 analysts that have coverage on Trent shares, 17 have a “buy” rating, five have a “hold” rating and three have a “sell” rating.
Trent shares ended the previous session 0.17%. It has declined 11.36% in the past month and 24% this year, so far.
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