ITC Limited 10-Year Targets

Below are the price targets for ITC Limited (ITC.BO) over the next 10 years.

Our price targets for ITC Limited (ITC.BO) in 2020 are:

• 498.24 (overvalued)
• 394.44 (fair value)
• 290.64 (undervalued)
• 179.92 (extreme undervalue)

The valuation targets for ITC Limited (ITC.BO) are based on a dividend growth rate of 11% which is derived from slightly less than one half the average dividend growth from 1999 to 2020 and applied to Edson Gould’s Altimeter.  A graphical representation of the overvalued, fair value, and undervalued levels are below.

The above Altimeter translates into the following undervalued and overvalued ranges since 2001:

10-Year Targets

Observations

The current price of ITC Limited is well below the historical undervalued level.  This has resulted in a high level of skepticism as to the long-term viability of the company.  However, our experience with the way tobacco stocks work seems to point to the possibility of ITC Limited experiencing a normal reaction within a longer term trend.  Our best way to demonstrate our claim is to look at what happened to Altria (MO).

In 2000 and 2003, Altria (MO) experienced a similar disparity between the undervalued range and the price.

The impact of the wide divergence between the price and the historical undervalued level resulted in the following stock price activity.

History doesn’t need to repeat.  However, from time to time, a company like ITC Limited may experience significant opportunities for new investors provided the stock is considered at or below the undervalued levels.

see also:

• ITC Limited Probability Data
• Hindustan Unilever Limited 10-Year Targets
• Work Smart, Not Hard (The Power of Compounding)
• More 10-Year Targets