Trent shares slide 3% after Q1. What Morgan Stanley, four other brokerages recommend

The company had posted a consolidated net profit of Rs 430 crore in the corresponding quarter last year. Revenue from operations grew 18% YoY to Rs 5,755 crore during the quarter. Compared with the March quarter, Trent's consolidated net profit rose 25% from Rs 413 crore, while revenue from operations increased 14% from Rs 5,028 crore.

Buy, sell or hold Trent shares?

Morgan Stanley maintained its 'Overweight' rating on Trent and raised its target price to Rs 3,406 from Rs 3,151, implying an upside of around 10%.The brokerage said Q1FY27 EBITDA margin came in well ahead of expectations, supported by year-on-year (YoY) gross margin expansion, while EBITDA growth remained strong despite higher depreciation weighing on profit before tax.

Morgan Stanley also reaffirmed its preference for the company-operated expansion model, raised its EBITDA margin assumptions following the strong quarterly performance, and flagged the Middle East conflict as a near-term risk to consumer sentiment.

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Macquarie maintained its 'Outperform' rating on Trent with a target price of Rs 3,600, implying an upside of around 16%. The brokerage said the company delivered a strong Q1 earnings beat, reflecting healthy demand. It attributed the gross margin outperformance to the rising contribution of higher-margin Westside sales. Macquarie also said management's clarification on FY27 store additions and its constructive commentary on demand reinforced its confidence in sales growth. It added that Trent has multiple levers to manage input cost pressures and sufficient lead time to implement changes, limiting the impact on margins.

Bernstein reiterated its 'Outperform' rating on Trent with a target price of Rs 3,500, implying an upside of around 13%. The brokerage said the company once again exceeded profitability expectations while continuing to execute on its growth strategy. It highlighted that Trent has delivered on its store addition plans, sustained growth and consistently improved margins. Bernstein believes the retailer can maintain steady-state growth of 18%-20%, although it remains cautious about near-term macroeconomic headwinds.

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HSBC maintained its 'Buy' rating on Trent with a target price of Rs 3,390, implying an upside of around 12%. The brokerage said Q1 EBITDA exceeded its estimates by around 10%, driven by stronger gross margins, which it believes reflected the lagged benefit of lower raw material costs. It noted that the fashion business reported low single-digit like-for-like (LFL) growth, while management's commentary was mixed but marginally more positive than in Q4FY26. HSBC added that a pickup in growth remains the key catalyst for the stock.

Jefferies remains bearish on Trent

Jefferies maintained its 'Hold' rating on Trent and raised its target price to Rs 3,435 from Rs 3,110, implying an upside of around 13%.The brokerage said strong earnings growth in the first quarter was driven by margin expansion and continued store additions, particularly at Zudio. It noted that like-for-like growth remained in the low single digits, partly due to store densification. Jefferies added that management's commentary remained cautious on near-term demand amid geopolitical uncertainty, which could push up commodity prices and affect both demand and supply chains, with the company already witnessing cost inflation.

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