On Friday, JPMorgan adjusted its stance on Hero MotoCorp Ltd. (HMCL:IN), downgrading the stock from Overweight to Neutral. The firm set a price target for Hero MotoCorp at INR5,320.00.
The revision comes amid observations of the company’s declining retail market share despite several new product launches over the past year and a half.
The analyst from JPMorgan noted that while Hero MotoCorp has benefited from the cyclical recovery in two-wheeler (2W) industry volumes, it has not been able to maintain its market share. The firm’s preference has shifted towards stocks that demonstrate market-share resilience and are less vulnerable to changes in the power-train mix.
Hero MotoCorp’s challenges are further compounded by its limited presence in the electric vehicle (EV) segment, where it holds just a 4% market share. The company has been losing ground in both the scooter and motorcycle categories. With competitors like TVS, Bajaj, and Ola introducing new vehicles, there are concerns that Hero’s market share could be increasingly pressured.
The financial institution’s forecasts for Hero MotoCorp’s earnings per share (EPS) for the fiscal years 2025 to 2027, as well as the price target, remain largely unchanged.
However, the downgrade reflects a view that there is less potential for a re-rating of Hero MotoCorp’s stock unless it shows signs of regaining market share.
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