"SM Entertainment Expected to Debut New Boy Group Next Year, Target Price Raised" [Click eStock]

Daol Investment & Securities raises target price to 120,000 won from 110,000 won

Daol Investment & Securities maintained its “Buy” rating on SM Entertainment on Oct. 21 and raised its target price to 120,000 won from 110,000 won.

“We are raising our estimates and target price to 120,000 won after shifting our reference period to 2027, when tours are expected to resume on a larger scale for major IPs and a new group is expected to debut,” said Lim Doyoung, an analyst at Daol Investment & Securities.

Lim forecast that SM Entertainment’s artists and IPs would be active next year. “A new boy group is expected to debut as early as the end of this year or, at the latest, early next year, while RIIZE and NCT WISH will resume touring on a larger scale,” he said. “We also believe that Girls’ Generation’s 20th-anniversary activities have been confirmed and that EXO is highly likely to hold a 15th-anniversary tour.” He added that Hearts2Hearts is set to hold its first fan meeting in Japan at an arena after posting solid Japanese album sales. With a positive response in North America and a fan base taking firm root across Asia, the group could also hold its first tour next year, he said.

“SM Entertainment has the clearest outlook for growth next year, led by its core business,” he said. He added that the recent rise in entertainment stocks reflected their defensive appeal amid market volatility, given that the sector had already undergone a steep derating, rather than an improvement in fundamentals. Lim said third-quarter results this year could be disappointing, but the company’s balanced contributions across its IPs and the resumption of activities by major IPs make its growth outlook for next year strong.

Lim ranked SM Entertainment, HYBE, YG Entertainment and JYP Entertainment, in that order, as his preferred companies in the sector.

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