UBS downgrades Tata Steel to 'neutral'; cuts price target nearly half

UBS has downgraded Tata Steel to 'neutral' from 'buy' and cut the price target by nearly half as it expects a decline in earnings and does not expect a recovery in the company's European operations, mainly Corus.

UBS has downgraded Tata Steel to 'neutral' from 'buy' and cut the price target by nearly half as it expects a decline in earnings and does not expect a recovery in the company's European operations, mainly Corus.

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The Swiss bank has cut the price target to 460 rupees from 860 rupees, citing lower steel prices and higher raw material costs.

"We believe Tata Steel's stock price is not attractive at the current levels," UBS said in a note to its clients.

Given limited visibility in macro recovery in near-medium term in Europe, Corus will remain an overhang given its high financial leverage and high cost structure, UBS added.