LS Securities on the 19th said Hyundai Engineering & Construction is expected to see earnings growth this year as U.S. nuclear power exports become tangible, naming it its "top pick" in the sector. It raised its target price to 140,000 won from 94,000 won. The previous trading day, Hyundai Engineering & Construction closed at 104,300 won, implying 34.2% upside.
Kim Se-ryeon, an analyst at LS Securities, said, "Hyundai Engineering & Construction's U.S. nuclear power business is expected to show visible results rather than mere expectations for 2026." With the United States facing a gap in large-scale nuclear plant construction after the Vogtle plant, she noted that a surge in power demand has become unavoidable as the government expands investment in artificial intelligence (AI) infrastructure. She assessed that this has brought the U.S. nuclear market to a point where collaboration with Korean builders is unavoidable.
Hyundai Engineering & Construction's preemptive response was also viewed positively. Kim said, "Hyundai Engineering & Construction last year hired a former vice president from Westinghouse, embarking on strategic preparations to penetrate the U.S. nuclear market."
Specifically, the two 300-megawatt (MW) Small Modular Reactor (SMR) units at the Palisades site in the United States, being pursued with Holtec, could break ground as early as the first quarter, while the 4-gigawatt (GW) large reactors that are the core power source of Fermi's "Project Metador" are seen as likely to shift to engineering, procurement and construction (EPC) around the summer.
Meanwhile, Kim projected Hyundai Engineering & Construction's fourth-quarter revenue at 7.8289 trillion won and operating profit at 101.4 billion won. That would be an 8% increase in revenue from a year earlier, with operating profit swinging to a profit.
In the short term, some expense burdens were reflected in results, she said. A bond call of 170 billion won occurred at Hyundai Engineering's Poland PDH·PP site, and profit expectations were lowered as cost adjustments were made on key pending projects including Saudi Marjan 6·Marjan 12 and Saudi Jafurah.
Kim added, however, "With the additional bond call at the Melaka combined-cycle power plant in Malaysia reflected, three variation order (VO) claims related to pending projects are estimated to have been finalized in the fourth quarter," adding, "As a result, midterm risks to 2026 earnings are gradually easing."