NEW DELHI: Shares of Zee Entertainment took a severe beating of 8 per cent on Tuesday after BofAML downgraded the stock to 'Underperform'.The financial services company called the stock valuation expensive, given the current slower growth, revising downwards its target price to Rs 375."Even against global peers, Zee is trading at 130 per cent/179 per cent premium on Ebitda/PE," it said in a statement.The scrip, which opened at Rs 500 on the BSE, ended down 7.97 per cent at Rs 462.60 on Tuesday.
The Sensex closed in the positive zone though.The brokerage said its current assessment of the company is not going to change even if Zee gets a strategic partner as any such thing "will not materially change the fundamentals".Any failure by Zee to rope in a strategic investor will be viewed negatively by the market, BofAML said further.It expects multiple headwinds to persist for the company over the next few quarters.Zee also struggled in the FO space today.We find the company expensive (it trades at 18x Ebitda vs 32x PE on FY19E) in the context of its growth (10 per cent/11 per cent Ebitda/EPS CAGR in FY19-22E).
Even against global peers, Zee is trading at 130 per cent/179 per cent premium on Ebitda/PE," the brokerage said in a statement.