JP Morgan Upgrades Tata Elxsi: Shares Jump 10%, Yet 17% Dip Predicted

• Tata Elxsi shares surged nearly 10% on Wednesday, January 7, marking the biggest single-day jump since August 2024.
• The rally followed JP Morgan upgrading the stock's rating from "Underweight" to "Neutral" and increasing the target price to ₹4,800.
• Despite the upgrade, JP Morgan's new target price still suggests a potential 17% decline from current levels.
• JP Morgan revised revenue and EPS estimates upwards due to improved ER&D demand, especially from the European Union.
• The 'Neutral' rating is due to Tata Elxsi's lower auto sector revenue share, slower estimated CAGR compared to rivals, and premium valuation.

Why It Matters: Tata Elxsi shares surged on JP Morgan upgrade, but a 'Neutral' rating and potential decline persist.