[Click eStock] "POSCO Holdings, Gradual Improvement in Earnings Expected... Target Price Down"

Hyundai Motor Securities forecasted on the 1st that POSCO Holdings' performance will gradually improve, bottoming out in the fourth quarter of last year. The target stock price was lowered from the previous 664,000 KRW to 620,000 KRW to reflect the downward revision in earnings, while maintaining a 'Buy' investment rating.

Hyunwook Park, a researcher at Hyundai Motor Securities, stated, "Considering the recent one-month stock price adjustment, the poor performance is already reflected in the stock price. After the Lunar New Year (Seol), the Chinese and global steel market conditions are expected to improve gradually, which will enhance investor sentiment toward POSCO Holdings. The price-to-book ratio (PBR) of 0.6 times is sufficiently attractive compared to global peers, so we maintain our investment rating," adding, "The target price was adjusted to reflect the earnings downgrade."

POSCO Holdings recorded sales of 18.664 trillion KRW and an operating profit of 304 billion KRW in the fourth quarter of last year, falling short of market expectations. Researcher Park analyzed, "The reason for the weaker-than-expected performance was the significant contraction in spreads due to falling steel prices amid a sluggish global steel market, poor performance in the secondary battery materials sector, and an inventory asset valuation loss of 131 billion KRW."

The performance is expected to gradually improve from the fourth quarter bottom. Researcher Park said, "From March, as the Chinese and global market conditions improve, steel segment spreads are expected to recover in the second quarter," and added, "POSCO Philbar Lithium Solutions is expected to start full-scale commercial production of lithium production facilities in the second half of this year. Although there are market concerns due to falling lithium prices, spodumene prices are also falling simultaneously, so profitability should be sufficient." He further added, "With performance gradually improving from the fourth quarter bottom last year, the stock price is also expected to trend upward."

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