[Click eStock] "YG Entertainment, Uncertainty Related to Blackpink... Target Price Down"

Girl group BLACKPINK's Jennie attended the screening of the HBO drama 'The Idol' during the 76th Cannes Film Festival held in Cannes, France, on May 22 (local time). [Image source=Yonhap News]

On the 23rd, NH Investment & Securities lowered the target price for YG Entertainment by 17% to 87,000 KRW, citing "uncertainties related to BLACKPINK's contract renewal." However, they maintained a buy rating, considering the stock is already undervalued.

On the same day, researcher Lee Hwajeong from NH Investment & Securities stated, "We changed the valuation base date to next year, when the impact of BLACKPINK's contract renewal will be fully reflected. We also revised down earnings estimates, assuming a decline. This is due to the assumption that BLACKPINK's activities next year will be limited to two solo albums." The target price-to-earnings ratio (PER) was lowered from 35 times to 30 times. This reflects reduced credibility compared to competitors due to repeated activity delays and ambiguous statements.

Lee explained, "Previously, the assumption for BLACKPINK's activities next year was the release of one group album and about 10 performances. However, considering the current activities of each member, it is highly likely that only two solo albums (Jennie, Ros?) will be released," adding, "Investor fatigue has reached its peak." He also emphasized, "To restore credibility, an official announcement regarding BLACKPINK's contract renewal is fundamental, along with diligent activities from all artists, including BLACKPINK."

Nevertheless, he said, "Even applying a conservative scenario related to BLACKPINK, the stock price decline is excessive. Therefore, the upside risk from confirming BLACKPINK's contract renewal and the debut of Baby Monster is actually significant," adding, "Regarding BLACKPINK's contract renewal, hints can be found in the major contract section of the quarterly report expected in mid-next month." He further noted, "Other positive factors include Treasure's Japan concert performance, which recorded initial sales of 1.7 million copies, and the rapid monetization of Baby Monster, whose debut is confirmed for next month," he added.

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