LS Securities said on the 8th that Hyundai Motor needs a re-rating as its shift toward a physical artificial intelligence (AI) corporations continues. It kept a "Buy (BUY)" recommendation and raised its target price to 420,000 won from 330,000 won. Hyundai Motor's previous trading day closing price was 350,500 won.
Researcher Lee Byung-geun at LS Securities said, "Hyundai Motor shares have stayed strong since it unveiled Boston Dynamics' Atlas at CES," and noted, "As Atlas deployment proceeds, the transformation from a legacy finished car maker to a physical AI corporations will gradually emerge."
Lee said, "Hyundai Motor's current valuation is even lower than the legacy finished car makers' average price-earnings ratio (PER) of 8.7 times," adding, "A re-rating will take place as this year's operating profit increases and the value of the robotics business is reflected."
He also assessed that the core automobile business results are solid. Lee projected Hyundai Motor's revenue in the fourth quarter of 2025 at 47.6 trillion won and operating profit at 2.6 trillion won. Those figures are up 2.1% and 9.3%, respectively, from a year earlier. By institutional sector, operating profit was presented as 1.8 trillion won for automobiles and 523 billion won for finance.
He said, "Global wholesale sales will reach 1.03 million units, and sales excluding China will reach 995,000 units," and explained, "Sales volume is rising 1.5% centered on the North American market, and hybrid sales are increasing 14.3%, driving revenue growth."
He expected results to keep improving this year as tariff easing, normalization of incentives, and a strong dollar overlap. Accordingly, he forecast Hyundai Motor's operating profit this year at 13.8 trillion won, up 11.6% from a year earlier.