HYBE, JYP, Hyundai Motor... "Target Price Downgrades" Flood In

Sharp Turn as KOSPI Rally Ends
Downgrade Reports Surge Since July
Disappointing Earnings and Valuation Pressures

As volatility in the domestic stock market widens, brokerage firms are issuing a flood of research reports lowering their target prices. Until June this year, reports raising target prices were predominant, but since July, the number of reports lowering targets has outpaced those raising them. The brokerage consensus is decisively shifting downward across key industries, including media, electronic equipment and devices, and semiconductors and related equipment.

As volatility in the domestic stock market increases, securities firms are releasing a flood of reports lowering their target stock prices. Getty Images

According to F&Guide, a financial information provider, the number of reports lowering target prices last month totaled 780, which is more than twice (by 397) the number of reports raising targets (383). From August 1 through August 23, reports lowering targets (571) also far outnumbered those raising targets (304). This trend coincides with the KOSPI dropping from its June 22 closing high of 9,114.55 points to 5,593.56 points as of July 30.

In the first half of this year, reports raising target prices maintained a decisive lead, supported by optimism over a market rally. In January, there were 843 such bullish reports (compared to 216 bearish ones), and 1,058 in February (compared to 115 bearish), underscoring strong optimism. From March through May as well, an average of 800 to 1,000 reports raising targets were released each month, and even in June, bullish reports (257) still outnumbered bearish ones (107).

By sector, from July 1 to August 23, media companies such as JYP Entertainment and electronic equipment firms such as LG Energy Solution saw the most downward revisions, with 102 reports. This was followed by 75 reports for semiconductor and related equipment companies such as SK hynix, 73 for pharmaceutical companies such as GC Green Cross, 65 for construction companies such as GS Engineering & Construction, and 64 for auto parts makers such as Hyundai WIA.

On an individual stock basis, JYP Entertainment saw the most target price cuts, with 28 reports. This was followed by Hyundai Motor Company (22 reports), Classys and HYBE (19 each), GS Engineering & Construction (18), and Netmarble (17). Yuanta Securities explained that for JYP Entertainment, its second-quarter results missed market consensus, highlighting weaker-than-expected early year growth and lingering uncertainty around TWICE's activities, making a stock rally unlikely. The firm cut its target price from KRW 60,000 to KRW 55,000. On August 14, iM Securities also lowered its target from KRW 80,000 to KRW 60,000, citing the start of TWICE's contract renewal period and Stray Kids' upcoming military enlistment.

For Hyundai Motor Company, ranked second, Samsung Securities on August 7 lowered its target from KRW 700,000 to KRW 650,000, reflecting weak domestic sales and regulatory changes that are increasingly unfavorable to hybrid vehicles. On July 27, DB Financial Investment also lowered its target from KRW 900,000 to KRW 700,000, citing overall market multiple contraction and valuation adjustments.

Regarding Classys, ranked third, Yuanta Securities on August 18 cut its target from KRW 74,000 to KRW 50,000 after second-quarter results missed expectations. On August 13, DB Financial Investment also said that as sluggish domestic sales persist, momentum from export growth via overseas subsidiaries (in Brazil and Japan) and entry into new markets like China is needed, lowering the target from KRW 68,000 to KRW 54,000.

For HYBE, on July 31, BNK Investment & Securities cited concerns over performance peaking due to reliance on specific artists and reputation risks related to governance, lowering its target from KRW 460,000 to KRW 300,000. On July 29, Samsung Securities also lowered its target from KRW 300,000 to KRW 255,000, citing increased market volatility, profitability concerns, and a more conservative earnings outlook due to the rising contribution from top-tier artists.

For the two chip giants, Samsung Electronics and SK hynix, there were 6 and 9 target price cuts, respectively. Kiwoom Securities on August 10 lowered its target for Samsung Electronics from KRW 390,000 to KRW 350,000, reflecting revised earnings forecasts and changes in market interest rates. On July 31, Shinhan Investment & Securities cut its target from KRW 500,000 to KRW 450,000. Hyungtae Kim, an analyst at Shinhan, explained, "We have reduced the PBR multiple to the industry average for DRAM peers to address the excessive price-to-book premium."

For SK hynix, Kiwoom Securities on August 10 lowered its target from KRW 2,500,000 to KRW 2,100,000 to reflect lower generic DRAM price outlooks, revised earnings forecasts, and market interest rate changes. On July 30, Hanwha Investment & Securities also cut its target from KRW 4,300,000 to KRW 3,150,000. Junyoung Park, an analyst at Hanwha, said, "If a company's earnings take a big hit due to a specific factor, it should be considered a fundamental deterioration. However, no such signs are apparent for SK hynix now," but also noted, "We are lowering our target to reflect the recent steep stock corrections in the broader market."

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