[Click eStock] "Lotte Wellfood Begins Full-Fledged Profitability Rebound... Target Price Raised"

On August 10, NH Investment & Securities reported that Lotte Wellfood has officially entered a phase of profitability rebound and raised its target price from 150,000 won to 165,000 won. The investment opinion remains 'buy'.

Joo Younghoon, a researcher at NH Investment & Securities, stated, "We have raised the target price by 10% compared to the previous estimate due to the upward revision of our earnings forecasts for 2026 and 2027," and explained, "The positive results in the second quarter of this year stem from the outcomes of last year's cost structure efforts, and the trend of improving profitability is expected to continue in the second half of the year."

Lotte Wellfood reported an earnings surprise in the second quarter of this year. On a consolidated basis, second-quarter sales rose by 8.6% year-on-year to 1.1557 trillion won, and operating profit soared by 88.5% to 64.7 billion won, far surpassing the consensus (the average forecast of securities firms) for operating profit. Joo analyzed, "Cost structure improvements drove a rebound in sales, and this maximized the positive impact on profitability."

Domestic sales grew 3.3% year-on-year. Weather conditions were favorable, driving growth in frozen dessert sales, while sales of confectionery and snacks expanded their growth rate compared to the previous quarter. Overseas sales increased by 27.6%, achieving growth exceeding 20% for the first time since the fourth quarter of 2022. Joo noted, "Outstanding performance in key markets such as India and Kazakhstan led the strong overseas business," and added, "Robust overseas sales growth is a key driver for valuation increases among food and beverage companies, so a rise in corporate value based on these fundamentals is anticipated."

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