Shinhan Investment & Securities on the 27th said government measures to boost domestic demand and improving duty-free performance are expected to have a positive impact on the share price of Hyundai Department Store.
It raised the target price to 115,000 won from 89,300 won and maintained a Buy rating.
Shinhan Investment & Securities expected Hyundai Department Store to grow thanks to various efforts to recover sales. Next year's revenue is estimated at 4.3705 trillion won, up 0.9% from a year earlier, and operating profit at 464.5 billion won, up 13.9%.
Hyundai Department Store plans to open The Hyundai Gwangju in 2027 and The Hyundai Busan in 2028. It is also improving the efficiency of existing stores.
Researcher Cho Seong-hun at Shinhan Investment & Securities said, "In addition to various efforts to recover sales, conservative investment execution compared with competitors has lowered the fixed-cost burden, amplifying operating leverage as sales increase."
Improvement in duty-free shop performance is also expected to have a positive impact on future growth. Hyundai Department Store ended operations at the Dongdaemun branch in Aug., seeing fixed-cost savings from streamlined operations.
Shinhan Investment & Securities also noted that Hyundai Department Store's shareholder return policy supports the downside of the share price. Hyundai Department Store plans to gradually increase the total dividends paid to 50 billion won by 2027. The interim dividends amount is set at a minimum of 10 billion won.