JYP Cuts Target Price by 21%—Here’s Why Analysts Keep a “Buy” Rating

“Low-Buy” Timing Shines Amid a Short-Term Earnings Chill

Even as Wall Street-style evaluations remain harsh, an opportunity for a turnaround is starting to take shape. Korea Investment & Securities has zeroed in on “JYP Entertainment” (JYP Ent.) for weak second-quarter performance, slashing its target price by 21.1%. Still, from a long-term perspective, investors are focusing on the “valuation appeal” embedded in the current share price, keeping the “buy” view firmly in place and drawing attention from the market.

On the 28th, Jung Hoyoon, a researcher at Korea Investment & Securities, estimated in a report that “JYP Ent.”’s operating profit in the second quarter would plunge 32.5% year-on-year to “35.7 billion won”. That figure falls even below the market consensus of 38.3 billion won. The assessment is that a short-term earnings freeze is unavoidable.

As expectations for earnings were lowered, forecast figures for annual profit also could not escape the downward spiral. This year’s operating profit outlook was trimmed from 184 billion won to “170 billion won”, while next year’s projection was cut from 208 billion won to “199 billion won”, respectively. The price-earnings ratio (PER) applied to the stock also slid from 25 times to “20 times”, and the target price was lowered from 95,000 won to “75,000 won”.

Even so, the reason the “buy” flag has not been lowered is clear. Endless declines in the share price have paradoxically created a “low-buy” opportunity, and the potential for explosive growth in the “Western markets” where large capital breathes.

In his analysis, researcher Jung said, “Just like other major domestic entertainment companies, the current stock price has entered an absolute undervalued range where “valuation appeal” is maximized.” He added, “As the K-pop industry expands by solidifying recognition in huge markets in the West, including North America, investors should weigh the buy timing from a “long-term perspective” rather than focusing on short-term earnings—it is a golden period to make that call.”