IBK Securities on the 9th said LOTTE Corporation has strong capacity to support funding within the group and assessed that concerns related to Lotte Engineering & Construction are excessive. It maintained a Buy rating and a target price of 40,000 won. LOTTE Corporation's previous day's closing price was 27,850 won.
Recently, LOTTE Corporation's share price has been weak on concerns related to Lotte Engineering & Construction. Researcher Nam Seong-hyeon at IBK Securities said, "However, this is excessive," adding, "Lotte Engineering & Construction secured about 541.5 billion won in cash and cash equivalents as of the third quarter, and on Nov. 27 secured an additional 700 billion won in resources through the issuance of hybrid securities."
While it is true that the construction industry is sluggish, it was also added that there is no need to interpret the situation too negatively given the group's strong capacity to provide funding.
Rebuilding has also been ongoing within Lotte Group recently. In Dec. last year, it sold LOTTE Rental at a valuation of 2.8 trillion won, and work is underway to reduce losses at major subsidiaries. Despite these efforts, internal and external business conditions are challenging, and as portfolio restructuring is in progress, it will not be easy to improve operating results, according to Researcher Nam's analysis.
Lotte Group recently announced 2026 executive appointments, signaling it is accelerating its group reorganization. It replaced CEOs numbering more than 20, and the heads of the food, retail, and construction divisions all stepped down. In addition, by abolishing the headquarters-based business oversight system (HQ), it is strengthening the group's decision-making framework and has begun shifting to a faster-paced system.
Researcher Nam interpreted this as "an effort for sustainable management through personnel restructuring along with structural streamlining of the business units."
Researcher Nam projected that Lotte Group will grow centered on retail and food in the short term and achieve overall improvement in the mid to long term.
Nam explained, "With the department store business performing well and the expansion of overseas business units, growth in the food division is expected, so domestic demand–centered growth will continue in the short term," adding, "In the mid to long term, normalization is expected in such previously sluggish divisions as chemicals, bio, 7‑Eleven, and GRS."