Today, shares of Oil and Natural Gas Corporation (ONGC) reached a high of 4% in morning trade on Bombay Stock Exchange (BSE) and traded among the top gainers of the Sensex index.
The stock is witnessing considerable attention since COVID-19 vaccine developments and is a sign of hope for a quicker than previously expected recovery in oil demand.
As of the previous session’s close, the stock was up more than 23% on the BSE in the month of December.
Morgan Stanley has upgraded the stock, citing a higher probability of recovery in average selling prices, improved outlook on domestic production and upside in refining associates post closures. As reported by Moneycontrol, the global financial services provider upgraded ONGC stock to ‘overweight’ from ‘equal-weight’ and raised its price target to Rs 115 from Rs 84.
Brokerage firm JM Financial has upgraded its FY22 PAT estimated for ONGC by 30 percent.
JM Financial said, “We upgrade ONGC as tactical buy on rising crude price. ONGC is our preferred play due to its relatively better production growth visibility and higher leverage to crude price. ONGC could also benefit from potential deregulation/hike in domestic gas prices. Hence, we upgrade our target price for ONGC to Rs 120.”
As per the brokerage firm, a Brent linked sharp earnings upgrade and a reduction in P/E valuation discount to the historical average due to improving earnings visibility, Moneycontrol reported.
Shares of ONGC traded 3.20 percent up at Rs 99.90 on BSE at 11:45 hours.