[Click eStock] "POSCO Future M, Short-Term Earnings Slump Unavoidable... Target Price↓"

Target Price Lowered from 320,000 KRW to 190,000 KRW

On the 14th, KB Securities downgraded the target price of POSCO Future M from 320,000 KRW to 190,000 KRW, anticipating unavoidable short-term performance weakness. The investment rating was maintained at 'Buy.'

Lee Chang-min, a researcher at KB Securities, explained, "The reason for lowering the target price is due to a 39% downward revision of the 2025 operating profit estimate, assuming a slowdown in demand from front-end customers caused by political variables in the US and Europe."

POSCO Future M's fourth-quarter performance last year is expected to fall short of market expectations. The researcher stated, "POSCO Future M's Q4 results are estimated at 766.8 billion KRW in sales, a 33% decrease compared to the same period last year, and an operating loss of 19.2 billion KRW, which will fall short of the consensus (average securities firm forecast) of 906.5 billion KRW in sales and an operating loss of 6 billion KRW. Although some reversal of inventory valuation losses is expected due to the rise in the KRW-USD exchange rate, one-time costs such as poor operating rates and impairment losses on obsolete inventory are anticipated, making a deficit inevitable."

KB Securities estimated POSCO Future M's annual performance this year to be 4 trillion KRW in sales, a 7% increase from the previous year, and an operating profit of 113.5 billion KRW, a 398% increase. The researcher added, "A 28% increase in cathode material shipments is expected compared to the previous year. However, geopolitical issues stemming from the US (the inauguration of the Trump administration's second term) and Europe (relaxation of carbon emission regulations) are expected to suppress investor sentiment for the time being, so it will take considerable time for the stock price to recover."