PB Fintech shares slip 7% after Morgan Stanley’s downgrade to ‘Underweight’ 

Shares ofPB Fintech, the parent company ofPaisabazaarandPolicybazaar, tumbled 6.7% in Monday’s intraday trade to a low of Rs 1,730.50 after global brokerage firmMorgan Stanleydowngraded PB the stock’s rating to “Underweight” with a target price of Rs 1,400.Morgan Stanley has previously assigned an “Equal Weight,” rating to the stock. Additionally, the stock’s target price indicates a potential for a 24% downside from Friday’s closing price.Thedowngradecomes as the brokerage firm expressed concerns about the company’s valuation, particularly itsFY27 EV/adjusted EBITDA, which is estimated to be around 65x.Another key concern raised by Morgan Stanley is that PB Fintech’s profit emergence has been weaker than initially anticipated. This slower-than-expected progress towards profitability is a significant factor contributing to the downgrade.The brokerage firm acknowledged that the stock’s recent outperformance has been linked to strong core new business premium growth, which exceeded 60% in the first half of FY25 (1HF25). However, Morgan Stanley anticipates that this growth will moderate in FY26, leading to a potential derating of the stock.Furthermore, Morgan Stanley noted that Paisabazaar, PB Fintech’s credit marketplace platform, has also been facing challenges. This adds to the concerns surrounding the company’s overall performance and outlook.Also read: PCBL shares dive 11% on reporting 37% YoY decline in Q3 PATPB Fintech share price targetOut of 20 analyst recommendations on Trendlyne, PB Fintech stock is a ‘strong buy’ and ‘hold’ according to 8 and 5 analysts respectively, while 2 analysts recommend a ‘sell’ rating on the stock. Meanwhile, 5 analysts suggest a ‘strong sell’ for PB Fintech.PB Fintech share price performanceIn the last one year, the shares of PB Fintech have given multibagger returns of 110.3% and have surged by 22.3% and 9.4% in the last 6 months and 3 months respectively.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)(You can now subscribe to our ETMarkets WhatsApp channel)