Credit Suisse downgrades Hero Motocorp on expected weak sales

Shares in Hero MotoCorp fell 1.5 percent to Rs 1,820.95 after Credit Suisse downgraded the stock to “neutral” from “overweight” and cut its target price to Rs 2,056 from Rs 2,401.

The investment bank cited caution about the company’s near-term outlook given an expected slowdown of sales in the domestic two-wheeler market, though it still preferred the stock on a medium-term basis.

“For Hero, almost the entire growth in despatches since Jan has been a function of it building inventory; hence with little scope for further inventory increase, despatches will track retail volumes and remain weak,” Credit Suisse said in a note dated on Thursday.

Reuters