[Click eStock] "YG Entertainment, Full-Scale Earnings Improvement in First Half of This Year... Target Price Up"

Daishin Securities on the 24th raised the target price for YG Entertainment from 65,000 KRW to 80,000 KRW, anticipating a full-scale performance improvement starting from the first half of this year. The investment rating was maintained at 'Buy.'

Im Su-jin, a researcher at Daishin Securities, stated, "The announced Blackpink world tour schedule greatly exceeded expectations, with over 55,000 attendees per show, expanding visibility for a world tour of approximately 2.4 million people." She added, "Accordingly, we have reflected this in the earnings estimates for 2025 and 2026, raising the target price by 23%." She further noted, "In the short term, if additional Blackpink world tour dates are announced, it is highly likely to act as a stock price momentum, so we maintain it as a second-favorite stock within the sector."

The analysis indicates that despite solid earnings growth, the stock remains undervalued. Researcher Im said, "Even with just Blackpink's world tour, the combined operating profit for 2025-2026 is expected to significantly exceed market expectations, and Baby Monster and Treasure are also showing favorable growth trends, so there is a high possibility of further upward revisions in earnings." She added, "Based on the current stock price, the expected price-to-earnings ratio (PER) is 18.1 times for 2025 and 14 times for 2026, which we still consider undervalued."

Last year's fourth-quarter performance was evaluated as favorable. YG Entertainment recorded sales of 104.1 billion KRW in the fourth quarter of last year, down 4.8% year-on-year, and operating profit increased by 176% to 1.1 billion KRW, surpassing consensus (average securities firm forecasts). Researcher Im analyzed, "Although an operating loss was expected after Baby Monster released six music videos following their first full album in Q4, profitability improved due to the success of the pop-up store and the launch of the light stick." She added, "This period marks the transition from the investment phase in rookie artists to the monetization phase, and performance improvement is expected to accelerate in the first half of the year."