Tata Motors (TTM) has a Zacks #1 Rank and trades at 16x fiscal 2011 consensus EPS estimates.
Growth and Income
Analysts estimate that Tata Motors will grow its EPS at 35% annually for the next 3 to 5 years. The stock also offers investors a dividend yield of 0.5%.
Company Description
Tata Motors is India’s largest vehicle maker. It sells passenger cars under names including Indigo, Tata Nano, Jaguar, and Range Rover.
Recent Results
On January 29, Tata announced fiscal third-quarter net sales increased 89%. The auto maker had a net profit of $86 million, up 52% from the year-ago quarter.
Strong Sales Trends
In the last three months, Tata Motors has continued to report impressive sales. In January, Tata’s auto sales grew 93% year-over-year. February sales climbed 48%, and March sales were up 38%.
Tata is scheduled to report fourth-quarter results on May 21.
Analyst Estimates Increasing
In the last two months, the Zacks Consensus Estimate for 2010 is up 14 cents, or 29.8%. The Zacks Consensus Estimate for 2011 increased 12 cents, or 11.3%. Analysts expect year-over-year EPS growth of 336% in 2010 and 93% in 2011.
The Chart
Tata Motors stock price sold-off about 15% from January through March. The dip was due to Daimler AG (DAI) selling its 5.3% stake in Tata Motors for $408.9 million, which ended a 50-year old partnership. There were also fears with India implementing higher excise taxes on auto sales beginning in March.
As the chart below shows, TTM shares have rebounded sharply off its lows of the year. The stock is now up about 230% in the last twelve months and is trading near a 52-week high.
