[Click e-Stock] "3Q Results Solid, but Beyond That Is a Concern" Hyundai Department Store Target Price Cut

IBK Investment & Securities lowered its target price for Hyundai Department Store from KRW 168,000 to KRW 150,000. It cited the possibility that profit growth could slow as consumers' spending capacity contracts, despite solid third-quarter results and an attractive valuation.

In a report on Hyundai Department Store on October 14, IBK Investment & Securities said, "It is somewhat early to forecast the fourth quarter, but profit growth in the department store business is likely to slow." The brokerage cited a high base from last year, the boost to profit margins from strong apparel sales growth in the fourth quarter of 2025, and the possibility that changes in the macroeconomic environment could reduce consumers' spending capacity.

Analyst Nam Seonghyeon said, "This year, factors such as a higher share of foreign customers and increased spending capacity driven by rising asset values affected results. In 2027, however, factors that constrain consumption could become a burden, including higher interest rates that increase financial costs and rising housing costs for middle- and lower-income households."

Nam said, "The 2026 PER of 6.7 times makes the valuation attractive," but added, "The potential slowdown in profit growth at the department stores could be a concern." Accordingly, the brokerage lowered its target multiple to 11.2 times and cut its target price to KRW 150,000, while maintaining its "Buy" rating. Hyundai Department Store shares closed at KRW 82,700 the previous day.

Third-quarter results are expected to return to growth. Consolidated revenue is estimated at KRW 1.0481 trillion, with operating profit of KRW 83.9 billion.

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