[Click eStock] "Q3 Earnings Season, Focus on Automobile, Steel, Shipbuilding, Banking, Securities, and Telecommunications"

Partial Industries 3Q Operating Profit Consensus Revised Upward Notably
Attention Needed for Automobile, Transportation, Shipbuilding, etc.

The full-scale Q3 earnings season has begun, but the market sentiment is not favorable. Over the past month, the Q3 operating profit forecast has been revised downward by 7.3%, which has also led to a 6.1% decrease in the Q4 operating profit forecast. Currently, there is a pervasive sense of anxiety about earnings across the KOSPI market. In this situation, Daishin Securities analyzed on the 21st that attention should be paid to sectors where earnings forecasts are changing.

Lee Kyung-min, a researcher at Daishin Securities, said, "Fortunately, the one-month consensus for KOSPI Q3 operating profit is being revised upward," adding, "Typically, earnings consensus is used on a three-month basis, but as the earnings season approaches, the one-month consensus tends to quickly reflect changes in the pre-earnings season."

According to Daishin Securities, sectors currently experiencing upward revisions in the one-month consensus for Q3 operating profit include steel, machinery, shipbuilding, automobiles, cosmetics/apparel, banking, securities, and software. Some of these sectors have a one-month consensus exceeding the three-month consensus. This is interpreted as a signal that better-than-expected earnings results can be anticipated.

Although many investors tend to focus on earnings announcements, actual stock prices often decline despite earnings surprises or conversely rebound despite earnings shocks. This is because stock prices reflect earnings expectations or uncertainties more than the actual earnings results. For example, Samsung Electronics recorded an earnings shock in early August, but its stock price continues to fluctuate around the 59,000 KRW level. Despite Q3 earnings results falling 34% below the consensus peak, the stock price is down 33% from its peak.

Lee said, "At the current point, sectors where stock prices are undervalued relative to the change rate of Q3 operating profit since the peak in August include semiconductors, automobiles, transportation, shipbuilding, essential consumer goods, construction, telecommunications, banking, and steel," adding, "Among these sectors, automobiles, transportation, telecommunications, banking, and securities have entered undervalued territory relative to earnings in both the three-month and one-month consensus." In particular, the automobile, steel, shipbuilding, banking, securities, and telecommunications sectors are attracting attention as sectors that are undervalued relative to earnings while their one-month consensus is being revised upward.

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