Korean Air is expected to achieve a surprise performance (earning surprise) in the third quarter of this year.
KB Securities raised its target stock price by 22.6% from 31,000 won to 38,000 won and raised its investment opinion from "HOLD" to "BUY", saying there is a possibility of a surprise in operating profit in the third quarter.
KB Securities expects Korean Air's third-quarter operating profit to reach 347.4 billion won (black conversion, + 386.5 billion won compared to the same period last year), exceeding market consensus and KB Securities'previous forecasts of 204.1 billion won (142.5%) and 273.2 billion won (368.1%), respectively.
"As shipping logistics congestion lasts longer than expected, additional operating profit related to cargo will be generated, and Korean Air's cargo competitiveness centered on cargo will serve as a strength to secure more cargo compared to its competitors at a time when new cargo is soaring," KB Securities said. "It seems that gains and losses in the passenger sector have begun to improve, which is expected to continue until 2022.".
KB Securities maintained its investment opinion 'buy' and target price of KRW 41,000 for Korean Air, saying, "It is expected to perform well in the third quarter with the highest quarterly sales.".
"The fourth quarter is a seasonal peak season for air cargo, and the achievement of Korean Air's highest cargo sales is expected to continue in the fourth quarter," KB Securities said.
"Although we are somewhat concerned about a decrease in demand for cargo due to ' With Corona' in 2022, it is expected to benefit from a recovery in demand for international flights.".
Reporter Lee Dong-hoon usinvestmentidea2020@gmail.com
