Trent share price rally ahead? UBS, Bernstein, Macquarie raise target, Jefferies stays cautious – Here’s why

The common theme across brokerage reports was that Trent’s profitability outperformed expectations, although the pace of revenue growth and like-for-like sales will remain the key monitorables over the coming quarters.

Trent share price trend

UBS on Trent: ‘Buy’

UBS maintained its ‘Buy’ rating on Trent and raised its 12-month target price to Rs 3,800, implying an upside of 25.3% from the current market price of Rs 3,032.20.

The brokerage said EBITDA came in 19% ahead of its estimates, driven by a 149-basis-point expansion in gross margins and rental and occupancy savings. It also highlighted Trent’s continued network expansion, with one net Westside store and 19 net Zudio stores added during the quarter.

UBS remained positive on the company’s long-term growth prospects, citing efficient execution, expansion into tier-2 and tier-3 markets and improving operating leverage.

“We remain bullish on Trent as a long term compounding play and we think some commodity inflation is unlikely to impair the earnings growth trajectory in FY27,” UBS said in the report.

“We believe the stock has significant upside risk if the demand conditions improve and Trent continues to solve for its own operational excellence,” UBS noted.

Macquarie on Trent: ‘Outperform’

Macquarie retained its ‘Outperform’ rating with a 12-month target price of Rs 3,600, implying an upside of 18.7%.

The brokerage said first-quarter EBITDA exceeded both its estimates and Street expectations. It attributed the beat to better gross margins and lower employee costs, while constructive management commentary on demand and store additions further strengthened its confidence.

Macquarie said it liked management’s guidance that FY27 store additions would remain similar to FY26, the continued rollout of Zudio in new markets and improving traction in newer brands.

“While the current performance increases our confidence in Trent’s ability to navigate periods of moderate growth, we believe greater clarity on sales growth momentum is key to near-term performance,”Macquarie added.

Brokerage target price comparison

Bernstein on Trent: ‘Outperform’

Bernstein too reiterated its ‘Outperform’ rating with a price target of Rs 3,500, indicating an upside potential of 15.4%.

The brokerage noted that standalone revenue grew 19% year-on-year while gross margins expanded by more than 140 basis points, largely due to a higher contribution from Westside. It also highlighted steady store additions, although it observed that newer tier-2 and peripheral market stores may take longer to mature.

Bernstein expects the ongoing margin improvement to support earnings even as growth normalises.

“Margin improvement continues to surprise. This time Westside is likely the key actor,” Bernstein explained.

HSBC on Trent: ‘Buy’

HSBC maintained its ‘Buy’ rating and increased its target price to Rs 3,390 from Rs 3,370, implying an upside of 11.8% from the current market price. The brokerage said the June-quarter EBITDA beat was driven primarily by higher gross margins.

HSBC said the lagged benefit of higher raw material pricing, a better mix led by Westside and operating efficiencies resulted in EBITDA beating estimates by nearly 10%.

However, it cautioned that revenue growth would remain the biggest driver for future stock performance, even though margins have improved meaningfully.

“The peak phase of revenue growth for the company appears to be over, but even sustaining 18-20% growth would still make Trent a top-quartile consumer discretionary company in terms of growth,” HSBC added. 

Jefferies on Trent: ‘Hold’

Jefferies, however, maintained its ‘Hold’ rating on Trent with a price target of Rs 3,435, implying an upside of 13.3%.

The brokerage acknowledged the strong quarter but remained more cautious than peers. It said EBITDA benefited from gross margin expansion and continued store additions, but management commentary on demand remained guarded due to geopolitical uncertainties and inflationary pressures.

Jefferies also trimmed its FY27-FY29 earnings estimates and said discretionary spending remained calibrated, with consumers continuing to prioritise value.

“Management commentary seemed cautious on near-term demand due to geopolitical uncertainty,” Jefferies noted.

Conclusion

Most Brokerages echoed a positive stance on Trent’s June-quarter performance, with stronger margins, improving operating leverage and continued store expansion emerging as the key positives.

However, one global brokerage house, Jefferies,remained the only cautious voice amid the wide-spread optimism. They have a ‘Hold’ rating, arguing that stronger profitability alone may not be enough and that sustained acceleration in revenue growth will be critical for the stock’s next leg of performance. Even among the bullish brokerages, the consensus was that while margin expansion has boosted confidence, sales growth will determine whether Trent can justify further valuation expansion.

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