[Click eStock] "POSCO, Stronger Profit Recovery Momentum... Target Price Up"

[Asia Economy Reporter Song Hwajeong] NH Investment & Securities forecasted on the 26th that POSCO is expected to show a strong profit recovery and raised the target stock price from 350,000 KRW to 420,000 KRW. The investment rating was maintained as 'Buy.'

Byun Jongman, a researcher at NH Investment & Securities, said, "Reflecting the rise in steel prices, we have raised the earnings per share forecasts for this year and next year by 19.5% and 19.6%, respectively," adding, "The target stock price was also increased by 20% compared to the previous level."

POSCO's first-quarter earnings this year are expected to exceed market expectations. NH Investment & Securities projected POSCO's consolidated sales for Q1 at 15.6354 trillion KRW and operating profit at 1.3628 trillion KRW. These figures represent increases of 7.5% and 93.2%, respectively, compared to the same period last year. Researcher Byun explained, "These estimates show sales similar to market consensus but operating profit exceeding it by 14.1%," adding, "The earnings improvement will be driven by the rise in the average selling price (ASP) of the steel business." Following the rise in international steel prices, domestic steel prices are also showing a strong increase. The ASP of carbon steel on a separate basis is expected to rise from 679,000 KRW in Q4 last year to 746,000 KRW in Q1 this year and 784,000 KRW in Q2. Accordingly, the separate basis operating profit for Q1 is expected to reach 981.6 billion KRW, a 114.3% increase compared to the same period last year, marking the highest in 10 quarters.

China's carbon reduction policy is also anticipated. The Chinese government mentioned steel production cuts this year to reduce carbon emissions. Researcher Byun analyzed, "Even if crude steel production does not actually decrease, if related policies are concretized, it will be positive for steel company stock prices," adding, "POSCO's stock price will be placed in an environment similar to the economic recovery and supply restriction policies from 2016 to 2018."

This content was produced with the assistance of AI translation services.