Brokerage firm Morgan Stanley has downgraded shares of Bengaluru-based real estate major Prestige Estates Projects Ltd. to “underweight” from its earlier rating of “overweight”.

It has also cut its price target by 15% to ₹1,510 from ₹1,770 earlier. The revised price target implies a potential downside of 11% from Tuesday’s closing for Prestige Estates.

Morgan Stanley had raised its price target on Prestige Estates to ₹1,770 in May this year from ₹1,400 earlier. The stock went on to make a high of ₹2,074 in June this year, before correcting from those levels.

The brokerage wrote in its note that Prestige Estates delivered pre-sales growth of 63% in financial year 2024. However, the company has only managed to achieve 29% of its financial year 2025 target until the first half of the year.

For the first half of the year, Prestige Estates reported pre-sales of just over ₹7,000 crore with a ₹4,023 crore number in the September quarter and a ₹3,029 crore figure in the June period.

As a result, Morgan Stanley has reduced its pre-sales growth estimate for Prestige Estate to 9% year-on-year, compared to its earlier projection of a 28% growth.

Morgan Stanley also said that the “underweight” rating now is a reflection of higher capex on Prestige Estates’ IP business and this weaker pre-sales momentum when compared to its peers.

Out of the 19 analysts that have coverage on Prestige Estates, 15 of them have a “buy” rating on the real estate major, while the rest have a “sell” rating.

Shares of Prestige Estates fell as much as 5% in early trading on Wednesday and are currently trading 3.8% lower at ₹1,638.55. The stock is up 38% so far for 2024.