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Investing.com - BofA Securities downgraded Larsen & Toubro Ltd. (NS:LT) (OTC:LTOUF) from Buy to Underperform on Monday, while maintaining its price target of INR3,700.00.
The downgrade comes after the stock rallied approximately 10% over the past two months, which BofA Securities indicates has brought valuations to fair levels with limited room for further expansion.
BofA Securities noted that Larsen & Toubro was previously its only Buy-rated stock in the Industrials sector following a broader sector downgrade in August 2024, supported by robust order inflow, strong earnings visibility, and reasonable valuations at that time.
The research firm acknowledged that over the past year, Larsen & Toubro delivered significant beats on both order inflow and earnings, outperforming BofA’s coverage universe.
Despite maintaining its price target, BofA Securities believes the key positive catalysts for the stock are now behind it, with no scope for further valuation expansion, prompting the rating change to Underperform.
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