[Click eStock] "Lotte Shopping, Favorable Supply and Demand Expected to Support Stable Stock Price... Target Price Up"

Target Price Raised by 31% Compared to Previous Level

Korea Investment & Securities on the 9th raised the target price for Lotte Shopping from 65,000 KRW to 85,000 KRW, expecting a favorable stock price trend due to supportive supply and demand. The investment rating was maintained at 'Buy.'

Myungjoo Kim, a researcher at Korea Investment & Securities, explained, "We are raising the target price by 31% compared to the previous one," adding, "Due to market adjustments caused by macroeconomic uncertainties, favorable supply and demand are flowing into the defensive retail sector." He further noted, "Although the operating profit improvement this year is smaller compared to competitors, there is a possibility of matching the stock prices of competitors since they are exposed to the same industry environment."

Lotte Shopping's first-quarter performance this year is expected to meet market expectations. Researcher Kim said, "Lotte Shopping's consolidated sales for the first quarter are expected to decrease by 1.6% year-on-year to 3.4584 trillion KRW, and operating profit is expected to increase by 18.0% to 135.6 billion KRW, both meeting market expectations. Due to sluggish domestic consumption in the first quarter, department stores, discount stores, and supermarkets are all expected to show somewhat disappointing top-line growth. The department store division, which incurred one-time costs in the first quarter of last year, is expected to see a slight increase in operating profit, while the operating profits of discount stores and supermarkets are expected to decline compared to the same period last year," he said.

The industry environment is expected to improve compared to last year. Researcher Kim forecasted, "Although domestic consumption did not rebound in the first quarter due to the golden holiday, it is highly likely to show improvement in the second half of the year," adding, "Considering the low base of the retail industry and the distribution industry environment, the environment Lotte Shopping faces this year will improve compared to last year."