In a significant development for State Bank of India (SBI) investors, UBS, a foreign brokerage house, recommends selling SBI shares.
This marks the first-ever “Sell” rating for SBI. UBS has also slashed the target price for SBI shares from Rs 740 to Rs 530.
Consequently, SBI shares have dipped by approximately 2% to Rs 575. UBS’s rating adjustment reflects a pessimistic outlook on the bank’s stock performance.
Axis Bank Rating Downgraded
UBS has also expressed concerns regarding the future performance of State Bank of India (SBI).
The brokerage house cites multiple reasons for the downgrade. UBS predicts that the return ratio may peak in FY 2024 and decline in FY 2025.
Additionally, they point out that unsecured loans at SBI have rapidly increased, accounting for 10.8% of total loans.
UBS has similarly downgraded the rating of Axis Bank, shifting it from “Buy” to “Neutral.” Furthermore, Axis Bank’s share price target has been reduced from Rs 1150 to Rs 1100.
Limited Gains for SBI Shares in the Last 6 Months
SBI shares have seen a modest increase of only 9% over the past six months. On April 13, 2023, SBI shares were valued at Rs 533.15,
and as of October 13, 2023, they have reached Rs 575. In the past year, State Bank of India’s shares have registered a 10% growth. The 52-week high for SBI shares stands at Rs 629.65, with the 52-week low at Rs 499.35.
