[Click eStock] "Emart, Growing Concerns Over Earnings Uncertainty... Target Price Down"

On the 19th, KB Securities lowered the target price for Emart from 140,000 won to 110,000 won, a decrease of about 21%. This marks the fifth consecutive downward revision since the target price of 260,000 won in August 2021, during the height of the COVID-19 pandemic.

Emart reported consolidated sales of 7.1354 trillion won and operating profit of 13.7 billion won in the first quarter. Compared to the same period last year, sales increased by only 2%, while operating profit plummeted by 60%, significantly missing market estimates. Operating profits for discount stores and Traders declined sharply due to increased selling and administrative expenses, and the online channel remains in the red. Starbucks' operating profit also fell by 29%, due to a 3.0 percentage point deterioration in cost ratio caused by rising coffee bean prices and a strong dollar. Operating profits for convenience stores, supermarkets, and the U.S. subsidiary also decreased.

KB Securities expects Emart to record annual sales of 30.1 trillion won and operating profit of 195.5 billion won this year. The operating profit forecast was revised down by 41% from the previous estimate of 333.8 billion won. Operating profits for discount stores and Traders are expected to decline annually due to a high base and increased selling and administrative expenses, and Starbucks is also expected to continue its sluggish performance. Operating profit estimates for next year and 2025 were also lowered by 16% and 10%, respectively.

Park Shin-ae, a researcher at KB Securities, said, "As many business segments significantly underperformed expectations in the first quarter, concerns about business competitiveness and earnings uncertainty have intensified," adding, "Until a sustainable earnings recovery becomes visible, a stock price rebound may be delayed."

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