[Click eStock] "Lotte Chemical, Turnaround Expected Next Year... Target Price Down"

Target Price Lowered from 190,000 Won to 155,000 Won

On the 21st, Meritz Securities downgraded the target price of Lotte Chemical from 190,000 KRW to 155,000 KRW, expecting the turnaround point to be next year. The investment rating was maintained as 'Buy.'

No Woo-ho, a researcher at Meritz Securities, stated, "The fair value is lowered due to changes in estimates," adding, "Although there is potential for further stock price increases due to positive industry factors such as additional economic stimulus announcements by the Chinese government, the turnaround point for Lotte Chemical is expected to be again one year later, in 2025."

Lotte Chemical is expected to continue posting losses in the fourth quarter following the third quarter of this year. Researcher No estimated, "Lotte Chemical is expected to record an operating loss of 205.4 billion KRW on a consolidated basis in the third quarter," analyzing, "The continued operating loss is due to persistent negative external factors, including the deepening supply-demand imbalance favoring petrochemical supply, continued price weakness, increased costs, and one-time factors from subsidiaries." He added, "In the fourth quarter as well, with no clear fundamental changes, an operating loss of 118.8 billion KRW is expected to continue."

Over the past month, the stock prices of pure petrochemical companies, including Lotte Chemical, have shown a successful short-term rebound. There are opinions that attention should be paid to positive factors as well. Researcher No said, "The short-term rebound is due to the butterfly effect following interest rate cuts in the US and China, which increases the likelihood of increased consumption of goods, leading to potential demand growth for petrochemical products, and a lagging decrease in input costs due to changes in oil price direction," adding, "This is somewhat similar to the background of the petrochemical cycle rebound in 2016. Although pessimism about the domestic petrochemical industry is dominant, attention should be paid to the butterfly effect of positive factors."

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