"POSCO Future M, LFP Market Entry Provides Upside... Target Price Raised"[Click e-Stock]

NH Investment & Securities Raises Target Price
from 148,000 Won to 180,000 Won

On September 17, NH Investment & Securities maintained its neutral investment rating for POSCO Future M, while raising the target price from 148,000 won to 180,000 won.

Minwoo Joo, a researcher at NH Investment & Securities, stated, "Entry into the lithium iron phosphate (LFP) market is expected to serve as a short-term catalyst for the stock price."

POSCO Future M is preparing to enter the LFP market through collaboration with global partners, and is expected to secure customer approval and commence full-scale mass production within the year. In this context, Joo explained, "Production capacity (CAPA) in 2027 is expected to be 27,000 tons, which could be expanded to 55,000 tons by the end of 2028 through additional conversion if customer approval is obtained." However, the company is trading at a 2028 price-to-earnings ratio (PER) of 162x and an EV/EBITDA of 51x, which is a significant premium compared to the sector averages of 40x and 15x, respectively, and therefore the neutral investment rating was maintained.

Regarding the company's third-quarter results this year, Joo predicted that figures would fall short of market expectations due to the strong won and lower-than-expected sales of cathode materials. He estimated sales at 735.2 billion won and operating profit at 16.8 billion won, which are lower than the consensus figures of 856.8 billion won and 26.8 billion won, respectively. He explained, "There was a negative impact of approximately 10 billion won on operating profit due to the sharp appreciation of the won, and cathode material sales volume is expected to fall short of expectations."

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