Market: KOSPI (005490)
Brokerage : iM Securities
Analyst : Yoonsang Kim
Investment Rating : Buy (Maintain)
Target Price : 400,000 KRW (Lowered)
Core Momentum : Despite macro and steel industry headwinds, strengthening subsidiary fundamentals including operational stabilization at POSCO Argentina and structural global lithium supply constraints are expected to support earnings recovery.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: Maintained Buy rating with a lowered target price of 400,000 KRW (down from 480,000 KRW to reflect a lowered Target PBR of 0.4x from 0.5x for the steel division, while maintaining the lithium valuation of ~10T KRW), offering a 33.1% upside from the base share price of 300,500 KRW.
- Key Valuation Multiples:
- 2026F: P/E 13.3x, P/B 0.4x, EV/EBITDA 5.7x, Dividend Yield 3.3%, ROE 3.2%, EPS 22,560 KRW, BPS 706,986 KRW
- 2027F: P/E 13.5x, P/B 0.4x, EV/EBITDA 5.7x, Dividend Yield 3.3%, ROE 3.1%, EPS 22,306 KRW, BPS 725,121 KRW
- 2028F: P/E 12.6x, P/B 0.4x, EV/EBITDA 5.6x, Dividend Yield 3.3%, ROE 3.3%, EPS 23,888 KRW, BPS 744,838 KRW
- Annual Financial Forecasts:
- 2026F: Revenue of 74.47T KRW, Operating Profit of 2.94T KRW, Controlling Net Profit of 1.83T KRW
- 2027F: Revenue of 75.60T KRW, Operating Profit of 3.13T KRW, Controlling Net Profit of 1.81T KRW
- 2028F: Revenue of 75.71T KRW, Operating Profit of 3.34T KRW, Controlling Net Profit of 1.93T KRW
🚀 2. [Market Opportunities & Business Outlook]
- 2Q26 Earnings Review:
- Consolidated operating profit reached 819.0B KRW (+15.9% QoQ), beating market consensus of 720.0B KRW.
- Parent steel operating profit recorded 274.0B KRW (+28.5% QoQ), supported by carbon steel roll-margin expansion.
- POSCO International posted record quarterly operating profit of 429.0B KRW (+20.0% QoQ) driven by Senex expansion and higher Cost Recovery.
- POSCO Argentina delivered its first profitable quarter on operational stabilization despite the expiration of provision reversal effects.
- 3Q26 Earnings Outlook:
- Consolidated operating profit is projected at 800.0B KRW (-2.7% QoQ), showing a minor sequential slowdown.
- Parent steel operating profit is expected to improve to 418.0B KRW (+52.5% QoQ) on automotive steel price hikes and higher sales volume.
- Key subsidiaries are expected to see temporary moderation due to lower Cost Recovery at POSCO International and scheduled major maintenance alongside soft lithium prices at POSCO Argentina.
- Industry Trends & Supply Dynamics:
- Headwinds persist from sluggish downstream demand in China and potential market adjustments in the US steel sector.
- While lithium prices remain subdued following the restart of CATL’s Jianxiawo mine, further downside is limited by resource nationalism in Zimbabwe and energy cost pressures disrupting Australian hard-rock supply.
📝 Editor’s Comment (Perspective)
The analyst views POSCO Holdings as an integrated industrial enterprise securing structural downside protection through parent-level roll-margin defense and the strengthening earning power of non-steel and battery materials subsidiaries amid macro headwinds. This perspective places greater emphasis on lithium price floor support driven by global supply constraints and the progressive earnings recovery from Argentine brine operations rather than temporary cyclical downturns in global steel markets or short-term maintenance schedules.
To verify whether this investment thesis continues to materialize, investors should monitor the return to normalized production and sales volume at POSCO Argentina following 3Q maintenance, the stabilization of lithium prices amid global mine supply bottlenecks, and the sustainability of parent roll-margin expansion driven by price hikes in primary products like automotive steel. These developments can be tracked through upcoming quarterly earnings releases, official IR presentations, and regulatory filings.
📢 Disclaimer & Source
Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
Investment Risk Notice: This content is provided for informational and linguistic reference purposes only. Under no circumstances does it constitute financial advice or a recommendation to buy or sell any specific securities. All investment decisions and financial responsibilities rest entirely with the investor.
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