What is the story about?
Shares of Multi Commodity Exchange of India (MCX) will be in focus on Wednesday, December 31, after the stock received an upgrade along with a sharp target price hike from global brokerage firm Morgan Stanley.
Morgan Stanley upgraded MCX to an 'Equalweight' rating and raised its target price by 66% to ₹11,135 from ₹6,710 earlier. However, the revised target implies an upside of just about 2% from the current market levels.
The brokerage said that MCX's average daily transaction revenue has surged over the past three months, driven by heightened price action across commodities. Morgan Stanley mentioned that this momentum does not appear to be fading anytime soon.
As a result, the brokerage has materially raised its earnings estimates and flagged potential upside risks if transaction volumes, which remain volatile, are sustained.
Morgan Stanley has also increased its earnings per share (EPS) forecasts by 15% for FY26, 20% for FY27 and 24% for FY28.
At current prices, MCX is trading at around 50 times FY27 estimated earnings and 47.5 times FY28 estimated earnings.
However, the brokerage said that if average daily transaction revenue sustains at ₹104 million over FY27-FY28, the stock would trade at about 35 times earnings, which represents a 5% premium to its long-term average valuation.
Among the 12 analysts tracking the stock, six have a 'Buy' rating, five recommend 'Hold' and one has a 'Sell' call.
MCX shares ended Tuesday's session marginally higher, up 0.046% at ₹10,942. The stock has surged nearly 76% over the past one year.
Morgan Stanley upgraded MCX to an 'Equalweight' rating and raised its target price by 66% to ₹11,135 from ₹6,710 earlier. However, the revised target implies an upside of just about 2% from the current market levels.
The brokerage said that MCX's average daily transaction revenue has surged over the past three months, driven by heightened price action across commodities. Morgan Stanley mentioned that this momentum does not appear to be fading anytime soon.
As a result, the brokerage has materially raised its earnings estimates and flagged potential upside risks if transaction volumes, which remain volatile, are sustained.
Morgan Stanley has also increased its earnings per share (EPS) forecasts by 15% for FY26, 20% for FY27 and 24% for FY28.
At current prices, MCX is trading at around 50 times FY27 estimated earnings and 47.5 times FY28 estimated earnings.
However, the brokerage said that if average daily transaction revenue sustains at ₹104 million over FY27-FY28, the stock would trade at about 35 times earnings, which represents a 5% premium to its long-term average valuation.
Among the 12 analysts tracking the stock, six have a 'Buy' rating, five recommend 'Hold' and one has a 'Sell' call.
MCX shares ended Tuesday's session marginally higher, up 0.046% at ₹10,942. The stock has surged nearly 76% over the past one year.
