[Click eStock] "POSCO, Stable Performance VS Unstable Market Conditions... Target Price Down"

Asia Economy Reporter Song Hwajeong] On the 26th, SK Securities downgraded the target price of POSCO from 480,000 KRW to 400,000 KRW, reflecting uncertainties in the industry outlook. The investment rating was maintained as 'Buy.'

Researcher Kwon Sunwoo of SK Securities explained, "We maintain the 'Buy' rating reflecting stable earnings, but the target price is lowered to reflect the gap with the current stock price and uncertainties in the industry outlook."

POSCO recorded consolidated sales of 20.6 trillion KRW, a 44.7% increase compared to the same period last year, and operating profit of 3.1 trillion KRW, a 367.5% increase in the third quarter of this year. On a separate basis, sales increased by 72% to 11.3 trillion KRW, and operating profit rose by 776.7% to 2.3 trillion KRW, setting a record high operating profit for both consolidated and separate bases. Researcher Kwon analyzed, "Compared to the previous quarter, on a separate basis, iron ore prices rose by 17% and coal by 36%, increasing raw material costs by about 1.2 trillion KRW, but the selling price increased from 901,000 KRW per ton to 1,097,000 KRW per ton, and production and sales volume also increased, which had a positive effect," adding, "On the consolidated side, overseas steel and global infrastructure sectors recorded strong performance."

High profitability is expected to continue into the fourth quarter, but uncertainties in the industry outlook are increasing due to various variables. Researcher Kwon said, "In China, there is a short-term factor with the upcoming Winter Olympics, and in the mid-to-long term, production cuts and supply reductions are underway for carbon neutrality, which is positive, but alongside this, changes in demand in the construction market and major downstream industries have also occurred," adding, "Additionally, raw material prices, which had risen sharply, may stabilize downward as supply disruptions are resolved, so with both upward and downward momentum coexisting, time is needed to confirm the industry outlook."