[Click e-Stock] "CJ Logistics to Return to Growth Trajectory Next Year... Target Price Cut"

Hana Securities lowered its target price for CJ Logistics from KRW 120,000 to KRW 100,000 on the 20th, saying the company's third-quarter earnings are expected to fall short of market consensus. However, it maintained its "Buy" rating, saying the company will return to a growth trajectory starting next year.

According to Hana Securities, CJ Logistics' third-quarter revenue is estimated at KRW 3.154 trillion, up 3% year over year, while operating profit is forecast at KRW 112.8 billion, down 24%. Both figures are expected to fall short of market consensus.

"We are lowering our target price for CJ Logistics to KRW 100,000, applying our target valuation of 11 times P/E to 12-month forward EPS of KRW 9,464, in response to the short-term earnings adjustment," said Ahn Do-hyun, an analyst at Hana Securities.

However, the firm maintained its "Buy" rating, saying it is more important to focus on medium- to long-term business indicators than on third-quarter earnings. The assessment is that the company's competitiveness remains intact despite quarterly results falling short of market consensus. "The company will get back on a growth trajectory starting next year," Ahn said. "Its market share in the parcel delivery segment will continue to expand, underpinned by its delivery competitiveness. From 2027, we expect price increases and the effects of operating leverage to gather momentum."

He also said that parcel volume growth, market share, and W&D contract wins are key indicators in the third-quarter results, adding, "In the long term, domestic e-commerce companies' choices will converge on CJ Logistics." Third-quarter parcel volume is expected to increase 2% year over year.

"Costs have risen overall since the war in the Middle East, but margins are trending higher quarter over quarter," he said. "Global operations continue to be affected by the weaker exchange rate and the suspension of project logistics, but growth at the company's key U.S. and Indian subsidiaries remains solid."

He added that another point of anticipation is the cancellation deadline for 12% of the company's treasury shares, which is due in September 2027. CJ Logistics closed regular trading at KRW 71,800 per share on October 19.

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