[Click eStock] "POSCO Holdings Faces Growing Uncertainty... Target Price Lowered"

Target Price Lowered from 390,000 Won to 350,000 Won

On October 2, KB Securities stated that POSCO Holdings has entered a period of heightened uncertainty and lowered its target price from 390,000 won to 350,000 won. The investment opinion was maintained as 'Buy'.

Choi Yonghyun, a researcher at KB Securities, explained, "We lowered the target price by 10% compared to the previous estimate. This is due to a 9.5% downward adjustment in the 2025 net profit attributable to controlling shareholders, reflecting the recognition of costs related to POSCO E&C's construction suspension and the Shinan Ansan Line accident, as well as the potential decline in demand for battery materials following the abolition of electric vehicle (EV) credits." He added, "The issues surrounding POSCO E&C and the possibility of acquiring HMM are creating uncertainty regarding the company's business direction." He continued, "However, these uncertainties are likely to be resolved within this year. We expect overall business division performance to improve in 2026, and once uncertainties are cleared, the stock price should resume its upward trajectory."

POSCO Holdings' earnings for the third quarter of this year are expected to fall short of market expectations. Researcher Choi stated, "POSCO Holdings' consolidated operating profit for the third quarter is projected to be 563.2 billion won, 19% below the consensus (the average forecast by securities firms). Underperformance in the infrastructure division is anticipated. POSCO E&C halted on-site construction for about three weeks during the third quarter, and since profit and loss are recognized based on progress, it is expected to record an operating loss. The steel division is projected to post an operating profit of 588 billion won, representing a 4% decline compared to the previous quarter."

The headquarters division is expected to see sales volume increase by 80,000 tons and an improvement in spread by 8,000 won compared to the previous quarter. However, the overseas subsidiary division is likely to be negatively affected in terms of profit and loss, as the performance of the Zhangjiagang Steel Mill, which is slated for sale, will still be reflected in the third quarter. For the battery materials segment, losses are expected to narrow due to rising raw material prices.

Fourth-quarter results are also expected to be similar to those of the third quarter. Researcher Choi said, "We estimate consolidated operating profit for the fourth quarter at 521 billion won, which is 27% below consensus, due to the possibility of additional cost recognition for POSCO E&C in the infrastructure division." He added, "In the case of battery materials, demand is likely to slow following the abolition of EV credits, so we expect the loss to widen compared to the third quarter."