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[Alpha Biz= Kim Jisun] Brokerages Raise Price Targets as Tobacco Maker Gains Both Defensive and Growth Premium
KT&G (033780) is expected to exceed its 2024 revenue and operating profit targets, buoyed by robust earnings momentum recorded last year.
The company has guided for annual revenue growth of 3–5% and operating profit growth of 6–8% this year. However, securities firms project that KT&G will sustain double-digit growth, surpassing its own guidance, and have consequently raised their target prices across the board.
Market observers note that KT&G’s market positioning has shifted. Long regarded as a representative defensive stock and a safe haven during declines in the benchmark KOSPI index, the company is now being reevaluated as a growth story.
Analysts attribute this to continued strong overseas cigarette performance and rising operating profit, which have added a growth premium to its traditional appeal as a dividend stock.
KT&G has moved beyond its previous export-oriented structure by strengthening direct overseas operations. In 2025, overseas cigarette sales surpassed domestic sales for the first time. Last year, the overseas cigarette business posted record-high revenue, sales volume, and operating profit.
According to earnings results announced on Feb. 5, overseas cigarette revenue rose 29.4% year-on-year to KRW 1.8775 trillion. Global cigarettes accounted for 54.1% of total cigarette revenue, exceeding the domestic share.
Supported by expanded overseas production facilities, KT&G plans to enhance profitability in 2026 through lower cost of goods sold and continued strategic price increases.
Through diversified business models such as OEM (original equipment manufacturing) and licensing, the company is expected to achieve double-digit growth in volume, revenue, and operating profit in its overseas cigarette segment—marking both quantitative and qualitative expansion.
KT&G also intends to maintain its strong shareholder return policy. The company has presented a total shareholder return ratio of “100%+a” for this year and will continue its upward trend in dividends per share. It has also carried out additional cancellations of treasury shares already held.
Ahead of the third amendment to the Commercial Act, such aggressive shareholder return measures are drawing attention in a capital market characterized by heightened volatility.
KT&G’s share price has surged approximately 82% over the past 11 months, rising from KRW 94,600 on March 13 last year to KRW 172,000 on Feb. 10 this year. As of today, the stock has extended its rally for 10 consecutive trading sessions, touching an intraday record high of KRW 174,200 and continuing its upward trajectory.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
