[Click eStock] "POSCO Holdings Takes a Breather in Q4... Target Price Down"

Shinhan Investment Corp. lowered the target price for POSCO Holdings to 600,000 KRW on the 27th, stating that "operating profit in the fourth quarter of this year will fall short of expectations," while maintaining a buy rating.

On the same day, Park Kwang-rae, a researcher at Shinhan Investment Corp., stated, "POSCO Holdings' fourth-quarter sales are expected to be 19.7 trillion KRW, and operating profit 979.8 billion KRW, falling short of market expectations."

The steel sector was cited as the reason for the poor performance. Researcher Park said, "Although carbon steel sales volume is expected to increase by 3.6% compared to the third quarter to about 8.2 million tons, this is insufficient to offset margin deterioration caused by a decline in average selling price and rising input costs. Also, the labor cost increase issue following the POSCO union strike will begin to be reflected in costs from the fourth quarter." Operating profit in the eco-friendly infrastructure sector is also expected to decrease to 366.4 billion KRW compared to the previous quarter, due to anticipated poor performance by POSCO International amid stabilization of international oil prices.

Next year, sales are projected to increase by 3.9% to 81.2 trillion KRW, and operating profit is expected to rise by 5.2% to 4.4 trillion KRW. Operating profit by business segment is expected to be 2.96 trillion KRW for steel, 1.56 trillion KRW for eco-friendly infrastructure, and 103.6 billion KRW (turning profitable) for eco-friendly materials. Since the POSCO Group mainly operates businesses benefiting from rising raw material prices such as steel, secondary batteries, and energy, a significant increase is unlikely in the next year’s international oil price stabilization phase.

Researcher Park added, "The future direction of the stock price depends on whether there will be a reappraisal of electric vehicle-related businesses. Stock price revaluation will begin with the easing of macroeconomic volatility. The currently high interest rate environment compared to the past negatively affects the discount rate aspect of new businesses."

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