“Hyundai Motor’s operating profit to plunge 8% next year” Target prices slashed one after another... SK Telecom cuts target price after lowering valuations of its AI DC and Anthropic stake [Stocktopia]

[Financial News] Here is our roundup of reports from major securities firms on the morning of November 5.
SK Telecom’s third-quarter results met market expectations, but its target price was lowered as the valuations of its AI data center subsidiary and its stake in Anthropic fell. Hyundai Motor Company is expected to face continued pressure on profitability next year amid intensifying sales competition in its key markets and increased investment in physical AI. SM Entertainment was seen as entering the start of a major growth cycle in 2027, when concerts by artists who debuted more recently are expected to expand in earnest.
◆ Hyundai Motor Company (005380)― Meritz Securities / Analyst Kim Jun-seong
- Target price: ₩380,000 (down 19.1%, from ₩470,000) | Previous closing price: ₩283,500
- Rating: Buy
Meritz Securities forecast that Hyundai Motor Company would face weak sales and deteriorating earnings in 2027, setting a target price of ₩380,000. It projected that operating profit next year would fall 8% from this year to ₩9.56 trillion.
Analyst Kim Jun-seong pointed out that global vehicle demand is stagnant while Chinese-made vehicles are rapidly gaining market share. He said, “Unless the company secures a competitive edge in areas such as cost competitiveness and autonomous mobility software performance, continued weak operating results will be unavoidable.” He forecast that profitability would remain under pressure as sales competition intensifies in key markets such as South Korea, the United States and Europe, and investment in physical AI increases.
He explained that the stock’s rise in the first half of this year was driven by expectations that Hyundai Motor Company could become a supplier of data devices for NVIDIA and Google’s physical AI development. Analyst Kim stressed, “The detailed results of negotiations for cooperation now need to be shared, and tangible progress is necessary.”
The analysis is that the company’s valuation can rise only if evidence of distinctive cooperation or results from technology development unique to Hyundai Motor Company are confirmed, given that NVIDIA is also pursuing joint physical AI development with other automakers and humanoid-robot companies.※ Physical AIAI that has a physical form, like a robot or autonomous vehicle, and performs perception, judgment and action in the real world. It is regarded as a next-generation business area that will shape the corporate value of automakers.
◆ SK Telecom (017670)― Daol Investment & Securities / Analyst Lee Da-yeon
- Target price: ₩115,000 (down 17.9%, from ₩140,000) | Previous closing price: ₩77,400
- Rating: Buy (maintained)
Daol Investment & Securities said SK Telecom’s third-quarter results met market expectations. However, it lowered its target price to ₩115,000 after reducing its valuation of the AI data center (DC) subsidiary and SK Telecom’s stake in U.S. AI company Anthropic.
Analyst Lee Da-yeon explained that SK Hyper, the data center development company, had obtained construction permits for some capacity in the Ulsan area and was discussing business terms with three or four global companies. While potential catalysts for the stock could emerge—including long-term contracts with high-quality tenants, joint investment and attracting financial investors—she said, “Nothing is concrete yet.”
She added, “Recent noise surrounding global AI DC financing is bound to raise concerns about SK Hyper’s developer business model, which carries a heavy initial cash-flow burden.”
This means the company’s core business has recovered, but the AI data center business has been valued conservatively because its specifics have yet to be confirmed. Analyst Lee forecast that details such as the scale of SK Hyper’s development projects and their financing structure could be confirmed as early as the first half of next year.※ DeveloperA business operator that leads the entire development process, from securing a site and obtaining permits to raising funds and construction. It is considered a business model with a heavy initial cash-flow burden, as investment costs are incurred before completion.
◆ SM Entertainment (041510)― Kiwoom Securities / Analyst Im Su-jin
- Target price: ₩130,000 (maintained) | Previous closing price: ₩70,800
- Rating: Buy (maintained)
Kiwoom Securities maintained its target price of ₩130,000, saying 2027 would mark the start of a major growth cycle for SM Entertainment. Third-quarter operating profit was ₩35.5 billion, in line with reduced market expectations.
Analyst Im Su-jin said, “The decline in top-line revenue caused by a gap in album releases has already been reflected in the share price,” and focused on the composition of earnings. Despite declines in album and concert revenue in the third quarter, merchandise (MD) sales rose 23%. She said, “The key point is that earnings, once dependent on album release cycles, are becoming spread across year-round fandom spending.”
She explained that concerts by artists in the early years of their careers begin expanding in earnest from their fourth year after debut, with 2027 marking the start of that expansion. She expected NCT Wish to expand the scale of its tours, followed by RIIZE’s second full-length album and Aespa’s comeback.
The analysis is that revenue is becoming less concentrated around album release dates and more distributed across year-round fandom spending, and that stronger merchandise capabilities could accelerate growth if tour scale expands next year.※ Merchandise (MD)Products made and sold using an artist’s image, logo or other branding, including light sticks, clothing and character goods. Because they can be sold regardless of album release schedules, they are seen as a way for entertainment companies to diversify their revenue sources.

[email protected] Seong Min-seo Reporter