Tata Steel Ltd.'s efforts to turn around its U.K. operations and a recovery back home are beginning to pay off, at least among analysts.
The stock is not only the cheapest bet among steelmakers, but is also the most preferred.
It's trading 6.5 times its one-year forward enterprise value to EBITDA ratio. That's at an 11 percent discount to JSW Steel Ltd. and 38 percent lower than state-run Steel Authority of India Ltd. Tata Steel is only marginally cheaper than Jindal Steel and Power Ltd.'s 6.9 times.
Almost 66 percent of the analysts surveyed by Bloomberg have a ‘Buy' rating, higher than rival steelmakers.
Improving fundamentals of domestic business and turnaround in European operations, along with stable spreads and operating efficiencies in the U.K. business, make Tata Steel an attractive bet, Morgan Stanley said.
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