[Click eStock] "Hyundai Motor, Earnings Forecast Raised... Oversold Undervaluation"

Target Price Maintained at 300,000 Won, 'One Pick' Within the Industry

[Asia Economy Reporter Ji Yeon-jin] Hyundai Motor Securities announced on the 30th that it maintains a buy rating and a target price of 300,000 KRW for Hyundai Motor, expecting the earnings consensus to be revised upward. The recent stock price decline has caused the price-to-earnings ratio (PER) to fall below the lower band, making it an undervalued stock.

Hyundai Motor's operating profit for the third quarter of this year is expected to reach 3.35 trillion KRW, an increase of 108.6% compared to the same period last year, exceeding initial forecasts by 22.6%. More favorable exchange rates, reduced incentives, and a price increase trend are expected to drive performance. Since June, domestic shipments have improved and exports have expanded, likely maximizing the exchange rate effect.

Jang Moon-soo, a researcher at Hyundai Motor Securities, stated, "Although there are concerns about economic recessions in major regions such as Europe due to macro uncertainties, demand slowdown has not been confirmed by indicators. On the contrary, low inventory and slower-than-expected supply chain recovery have expanded the appeal of undervaluation as both pent-up demand depletion and price increase effects continue simultaneously, and profit structure has further improved due to raw material stabilization."

Since the beginning of this year, the prolonged supply shock and depleted inventory have reached their limits, but inelastic supply recovery and low inventory levels are expected to continue. This is an important factor driving continuous improvement in profitability despite increased costs such as raw materials, labor, and energy.

Researcher Jang added, "We believe the favorable pricing environment will persist long-term. Continued supply shortages that fail to meet pent-up demand will structurally support price increases, and through moderate volume recovery, mix improvement, and new car price hikes, the recently increased cost burden will be sufficiently offset, doubling profit-generating capability."

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