Foreign Tourists Flock to Key Spots in Seoul and Busan... Target Price Raised [Click e-Stock]

"Inbound Sales to Foreign Customers Expected to Grow Over 90%"

On June 18, Daishin Securities raised its target price for Lotte Shopping from 200,000 won to 260,000 won while maintaining its "Buy" rating.

Jung-Hyun Yoo, a researcher at Daishin Securities, stated, "We are raising our target price for Lotte Shopping in line with upward revisions to earnings forecasts for 2026 and 2027."

Lotte Shopping has been evaluated as enhancing its department store competitiveness by achieving high growth at key stores frequented by foreign tourists, including those in Myeong-dong and Jamsil in Seoul, as well as in major locations in Busan. Yoo explained, "The operating margin of the department store division, which accounts for most of the company’s overall operating profit, is rising, and we expect a strong improvement in profitability over the next two to three years."

He added, "As Lotte Shopping's profit levels improve structurally, its return on equity (ROE) is also increasing faster than expected. Accordingly, we foresee an upward revaluation of the price-to-book ratio (PBR) over the medium to long term."

Lotte Shopping's consolidated net sales for the second quarter are projected to be approximately 3.6051 trillion won, with operating profit expected to reach 108.1 billion won. For the department store business, existing domestic stores are forecast to post a growth rate of 14%. Yoo noted, "With the recovery in consumer sentiment, high-margin, economically sensitive categories in domestic fashion are expected to continue double-digit growth, and inbound sales to foreign customers are projected to increase by more than 90%, driving overall earnings improvement."

Sales growth is also anticipated in the hypermarket segment. Yoo commented, "Domestic hypermarket sales are expected to grow by more than 3% at existing stores, driven by strong performance at competing outlets such as Homeplus and by policies boosting consumption, which should sustain the current trend of profitability improvement."

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