Shinsegae is experiencing strong gains in early trading, driven by a series of upgraded price targets from analysts.
As of 10:14 a.m. on June 9, Shinsegae shares were trading at 621,000 won, up 49,000 won (8.57%) from the previous session on the Korea Exchange.
At one point, the stock price surged to 640,000 won.
Analysts are raising their target prices for Shinsegae, reflecting the wealth effect from the recent bullish domestic stock market and expectations for improved department store performance.
Korea Investment & Securities raised its target price for Shinsegae from 700,000 won to 900,000 won, an increase of 28.6%, citing anticipated growth in department store sales this year due to the wealth effect. The firm maintained its 'buy' rating.
Kim Myung-joo, a researcher at Korea Investment & Securities, stated, "The factors driving domestic sales in the department store industry are the wealth effect and the fear of missing out (FOMO) phenomenon due to rising luxury jewelry prices. I believe Shinsegae will show the most pronounced sales trends among the three major department stores."
Previously, IBK Investment & Securities also raised its target price for Shinsegae from 530,000 won to 780,000 won. Meritz Securities introduced a new target price of 770,000 won on the same day.
Kim Jeong-wook, a researcher at Meritz Securities, noted, "The renewal effect of the flagship store and increased foreign sales are contributing to robust growth in the department store sector. Considering the improvement in profitability for the duty-free business and the easing of depreciation costs in the second half of the year, we expect the positive performance trend to continue. Shinsegae has the structure to directly absorb inbound demand most effectively."
* This article has been translated by AI.
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