[Click e-Stock] "Nexen Tire Set for Core Business Earnings Improvement This Year...Target Price Raised"

Daishin Securities raised its target price for Nexen Tire to 9,800 won on the 5th, saying that the company’s corporate value is expected to trend upward on the back of improved profitability this year.

Daishin Securities analyst Kim Gwiyeon said, "The target price of 9,800 won is derived by applying a target price-to-earnings ratio (PER) to the 2026 earnings per share (EPS) estimate of 1,273 won." The newly presented 9,800 won is 28% higher than the previous target.

As reasons for this upward revision, analyst Kim cited the following factors: the full-year impact of the Czech plant running at full capacity; market share expansion through more efficient distribution networks; a higher proportion of high-inch tires; and improved visibility for profitability enhancement thanks to the stabilization of raw material and freight costs.

This year’s revenue is estimated at 3.4 trillion won and operating profit at 215.7 billion won, up 6% and 27%, respectively, from a year earlier. Accordingly, the operating profit margin (OPM) is expected to reach 6.4%. Analyst Kim added, "It is likely that the company will achieve its guidance of 3.3 trillion won in revenue and a high-single-digit operating margin."

On the same day, Hana Securities also raised its target price for Nexen Tire to 10,500 won. Hana Securities analyst Song Seonjae said, "Fourth-quarter results fell short of expectations due to higher raw material costs and depreciation, despite strong top-line growth." However, he projected that "in 2026, revenue will increase by 6% driven by higher utilization at the Czech plant, strengthened sales bases, and higher selling prices, while operating profit will rise by 26% thanks to the stabilization of raw material costs, transportation costs, and tariffs."

Song also pointed out that Nexen Tire’s share price has risen 37% over the past six months, underperforming the market indices (KOSPI +71%, Hankook Tire & Technology +51%, Kumho Tire +30%). He added, "Given that the current valuation is low at just over 5 times P/E and just under 0.4 times P/B, and considering that earnings have passed their trough and are now on an improving trajectory, the share price is likely to rebound once the tariff-rate issue is resolved."

This content was produced with the assistance of AI translation services.