Target Price Doubled Due to Consecutive Strong Earnings

876 Upward Revision Reports in One Month
Significant Performance Improvement in CJ CheilJedang, GS, and Others Recovering from COVID-19 Impact

[Asia Economy Reporter Song Hwajeong] As corporate earnings continued to improve in the first quarter of this year, target stock prices have also been repeatedly revised upward.

According to financial information provider FnGuide on the 12th, there were 876 reports of upward revisions to corporate target stock prices in the past month, more than double the 407 reports during the same period last year. On the other hand, reports of downward revisions amounted to only 119, sharply decreasing from 514 during the same period last year. Due to the impact of COVID-19, the number of downward revisions increased as corporate earnings were adversely affected in the first quarter of last year, but this year, as companies recovered from the COVID-19 shock, earnings have noticeably improved, leading to continued upward revisions.

On the 10th, CJ CheilJedang, which announced its first-quarter earnings, saw six securities firms simultaneously raise their target stock prices after the announcement. On a consolidated basis, CJ CheilJedang recorded sales of KRW 6.1781 trillion, up 6.0% year-on-year, and operating profit of KRW 385.1 billion, up 39.6%, marking the best first-quarter performance ever. Daishin Securities raised CJ CheilJedang’s target price from KRW 550,000 to KRW 630,000; IBK Investment & Securities from KRW 520,000 to KRW 580,000; Cape Investment & Securities from KRW 550,000 to KRW 600,000; NH Investment & Securities from KRW 600,000 to KRW 700,000; Hi Investment & Securities from KRW 530,000 to KRW 570,000; and Kiwoom Securities from KRW 610,000 to KRW 650,000. Researcher Jomi-jin of NH Investment & Securities said, “Excluding logistics, operating profit increased by 55% year-on-year to KRW 342.3 billion, exceeding market consensus by more than 30%, delivering an earnings surprise. Although concerns about growth slowdown and profitability decline were high due to the high base last year caused by increased food demand from COVID-19, quarterly growth and profitability improvements are expected to continue.”

In addition, companies such as GS, Kakao, and Lotte Chemical, which recently announced strong earnings, also saw their target stock prices consecutively revised upward. Lotte Chemical’s target price rose to as high as KRW 532,000, and Kakao’s to KRW 152,000.

With corporate earnings continuing to improve, the trend of upward revisions to target stock prices is expected to persist. According to Daishin Securities, among 205 companies with two or more earnings consensus data as of last week, 109 companies have announced their first-quarter earnings. On a combined basis, their sales exceeded consensus by 5.2%, operating profit by 11.1%, and net profit by 81%. Researcher Kim Jiyoon of Daishin Securities said, “Based on strong first-quarter earnings, upward revisions to KOSPI operating profit consensus are continuing. Over the past month, the annual operating profit consensus for this year was revised upward by 6.0%, and for the second quarter by 7.5%.”

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