[Click eStock] "Megastudy, Expected Earnings Turnaround Next Year... Target Price Downgraded"

NH Investment & Securities on the 13th forecasted a performance bottoming for Megastudy Education this year, with a turnaround expected in 2025. They maintained a 'Buy' investment rating but lowered the target price to 60,000 KRW.

Researcher Jeong Ji-yoon of NH Investment & Securities stated, "We anticipate a company-wide performance turnaround in 2025 due to profit growth in the high school division and profit generation in the adult division."

For the fourth quarter of this year, consolidated sales are expected to decrease by 1% year-on-year to 206.4 billion KRW, while operating profit is projected to surge 73% to 2.6 billion KRW, in line with consensus estimates.

Jeong explained, "The main reason for lowering the target price was adjusting the target multiple to an average PER band of 7.5 times over the past two years," adding, "As of 2024, 40 billion KRW worth of treasury shares have been repurchased, and all these shares are planned to be canceled by the end of the year or early next year."

Jeong added, "In 2025, considering the first profit increase in three years and a shareholder return policy of at least 60% of net income, we have maintained the 'Buy' rating."