Bajaj Auto Shares: An analyst sees the stock at ₹12,000, another sees it at ₹6,250

NSE

Brokerage Rating Target price (next 12 months) UBS Sell ₹6,250 Nuvama Buy ₹12,000 Jefferies Buy ₹11,640 Motilal Oswal Neutral ₹8,660

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The Bajaj Auto Ltd. stock is witnessing a classic clash between the bulls and the bears on Monday, July 8, after the company launched the world's first CNG-integrated motorcycle, Freedom 125.In the bullish camp, analysts from Jefferies, and Nuvama advocate for Bajaj Auto while UBS and Motilal Oswal remain bearish. Bajaj Auto shares opened a percent lower at ₹9,552.65 on the NSE today.Domestic brokerage firm Nuvama Institutional Equities has maintained a 'Buy' rating, and upped its price target on the Bajaj Auto stock following the launch of the CNG bike Freedom. It has a target of ₹12,000 per share from ₹10,340 apiece earlier.Nuvama believes the 'Freedom' 125cc motorcycle should see volumes of 10,000 units per month in the second half of the financial year 2025 and 20,000 units per month in FY26. The brokerage said the CNG model should offer better cost of ownership, in comparison to petrol motorcycles, and can attract cost-conscious customers, hoping the powertrain would be adapted for multiple engine displacements ahead.Nuvama expects Bajaj Auto to generate revenue and EBITDA CAGR at 12% and 15%, respectively, over FY24–26, with an average return on equity of 35%.Global brokerage firm Jefferies has also raised Bajaj Auto price target to ₹11,640 from ₹10,500 earlier. The brokerage has maintained a 'Buy' recommendation on the stock.Jefferies highlighted that the CNG bike Freedom offers an attractive value proposition with operating costs 50% lower than traditional bikes. Additionally, Bajaj Auto is increasing its market share in the 125 cc bike segment.The foreign brokerage expects 15% volume and 17% earnings per share CAGR over FY24-27 estimates.UBS, meanwhile, assigned a 'Sell' rating on Bajaj Auto, with a price target of ₹6,250 per share, citing the company launched 125cc CNG motorcycle at ₹95,000-1,10,000.The foreign brokerage continues to believe that the future lies in electric vehicles (EVs), and that CNG motorcycles will not slow the pace of market electrification.Motorcycles in the 100-110cc and entry-level 125cc segments will be affected in the medium term, UBS said in its note.Its analysis indicates that Hero holds a 66% market share in this segment.Another brokerage house Motilal Oswal said the Bajaj Auto stock has already witnessed a significant rerating in the last 12 months on the back of its market share gains in 125cc+ domestic motorcycles, improved margins and a one-of-a-kind policy to reward shareholders."After a recent rally, the valuation now at 29x/25 FY25E/26E EPS appears reasonable," it said while reiterating a 'Neutral' rating, with a price target of8,660 per share.