Stock prices have fallen more than 30% in the past month, but analysts' target prices remain unchanged. Major stocks, including Samsung Electronics and SK Hynix, show a significant gap between current prices and target prices, which are more than double the current levels.
According to financial information provider FnGuide on July 27, a comparison of stock prices and target prices for the top 10 market capitalization companies over the past month (from June 24 to July 24) revealed that Samsung Electronics' average target price over the last three months is 513,958 won, which is 106.0% higher than its current stock price. Similarly, SK Hynix's average target price is 3,626,087 won, also 106.1% above its current price.
Hyundai Motor's average target price is 82.5% higher than its current stock price, while HD Hyundai Electric is at 78.0%, Hanwha Aerospace at 76.3%, and Kia at 75.5%. Posco Holdings shows a potential increase of 71.1%, LG Energy Solution at 66.8%, Naver at 59.1%, and Samsung Biologics at 32.2%.
The widening gap between target prices and current stock prices is attributed to a sharp decline in stock prices due to recent market adjustments. In the past month, SK Hynix's stock dropped by 31.8%, while Samsung Electronics fell by 26.7%. Other companies like Hyundai Motor (-21.2%), HD Hyundai Electric (-13.6%), Hanwha Aerospace (-10.5%), LG Energy Solution (-9.8%), Kia (-6.0%), and Posco Holdings (-5.6%) also experienced declines. In contrast, Samsung Biologics (9.6%) and Naver (4.1%) saw increases.
Despite the significant stock price adjustments, analysts' earnings forecasts have not changed much, contributing to the growing gap between target and current prices. In fact, while Samsung Electronics and SK Hynix saw their stock prices drop by 26.7% and 31.8% respectively over the past month, their third-quarter operating profit consensus was revised upward by 6.2% and 2.5%. Samsung Biologics and HD Hyundai Electric also had their earnings forecasts adjusted upward, maintaining high target prices.
Samsung Biologics (4.6%) and HD Hyundai Electric (2.3%) also saw upward revisions in their third-quarter operating profit forecasts. Conversely, Naver (-8.0%), Kia (-5.4%), Hyundai Motor (-3.6%), Posco Holdings (-1.7%), LG Energy Solution (-0.8%), and Hanwha Aerospace (-0.8%) experienced downward adjustments, although the declines were limited.
An industry insider noted, "The recent market adjustment has been more influenced by external uncertainties and weakened investor sentiment than by a rapid deterioration in corporate fundamentals. If the third-quarter earnings meet or exceed market expectations, the gap between stock prices and target prices may gradually narrow."
* This article has been translated by AI.
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