[Market Focus] CJ CheilJedang Drops Over 6% as Securities Firms Lower Target Prices on Weak Earnings

CJ CheilJedang is trading lower on the 13th. This appears to be due to downward revisions of target prices by securities firms following disappointing earnings results.

As of 10:57 a.m. on this day, shares of CJ CheilJedang were trading at 234,500 won on the Korea Exchange, down 6.57% from the previous trading day. The stock opened at 251,000 won and at one point during the session fell to as low as 234,000 won.

In the second quarter of this year, CJ CheilJedang reported sales of 7.2372 trillion won and operating profit of 353.1 billion won, both falling short of consensus market expectations. Joo Younghoon, an analyst at NH Investment & Securities, commented, "Domestic sales in the food division declined by 5% year-on-year due to sluggish consumer demand. While Europe and Japan saw double-digit growth, growth in the United States stagnated." He added, "Sales have declined and the burden of raw material costs continues to increase, resulting in deteriorating profitability." He lowered his target price from 350,000 won to 320,000 won.

Lee Kyungshin, an analyst at iM Securities, also stated, "The margin level has decreased, and despite stable raw material prices, other costs including subsidiary materials remain a burden," lowering his target price from 380,000 won to 350,000 won.

In addition, Daishin Securities and Kiwoom Securities also revised their target prices downward to 300,000 won and 320,000 won, respectively.