"GS Retail's Supermarket Business Seen Posting Strong Results... Shares Undervalued" [Click e Stock]

DB Securities maintained its target price of 35,000 won and its "Buy" rating on GS Retail on October 7, saying it expects a meaningful improvement in the supermarket division's performance.

In a report released that day, DB Securities said, "GS Retail's third-quarter consolidated operating profit is expected to rise 4% year over year to 115.6 billion won, in line with market expectations."

By division, convenience stores are expected to post growth of 1% to 2%, weighed down by a high base following the impact of consumer coupon payments last year. Supermarkets are expected to achieve double-digit sales growth for a second consecutive quarter. This is due to a gradual recent rebound in consumer sentiment and benefits from the restructuring of stores by a major competitor.

DB Securities said, "The risk of losses in the development business division, which was a major cause of the company's weak performance through last year, has been resolved. The current share price has fallen to eight times next year's projected price-to-earnings (P/E) ratio, putting it in oversold territory. We therefore maintain our Buy rating on valuation grounds."

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