Daol Investment Securities announced on October 20 that it has raised its target price for SM Entertainment to 120,000 won, citing strong visibility for growth in the company's core business by 2027. The firm maintained its 'buy' rating.
In a report released that day, analyst Lim Do-young stated, "Recent industry stock prices have been influenced more by defensive appeal amid market volatility rather than fundamental improvements, as the sector has already experienced a significant de-rating."
He added, "While third-quarter results may be disappointing due to the intellectual property (IP) activity schedule, the visibility for growth next year is high due to contributions and the resumption of activities."
Looking ahead to 2027, the resumption of major artists' tours and the debut of new groups are expected to drive growth. Lim noted, "The debut of a new boy group is anticipated by the end of this year or early next year, and groups like RISE and NCT WISH are also expected to expand their scale and resume touring."
Additionally, he mentioned, "The confirmation of Girls' Generation's 20th-anniversary activities and the likelihood of a 15th-anniversary tour for EXO are high," and added that the group HaeTuu is set to hold its first fan meeting in Japan at an arena following strong sales of their Japanese album since their debut in August.
Meanwhile, SM Entertainment's third-quarter results are expected to fall short of market expectations. Lim projected revenues of 284.9 billion won and operating profits of 33.5 billion won, which would be below market consensus estimates.
* This article has been translated by AI.
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