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Nongshim headquarters. (Photo = Nongshim) |
[Alpha Biz= Paul Lee] Several securities firms have lowered their target prices for Nongshim despite the company reporting higher revenue and operating profit in 2025, raising questions about the market’s cautious outlook.
According to market data on March 12, Nongshim shares closed at 374,000 won, down 5.08% from the previous trading day on the Korea Exchange.
A day earlier, Nongshim announced that its 2025 consolidated revenue reached 3.51 trillion won, while operating profit rose to 183.9 billion won, up 2.2% and 12.8% year-on-year, respectively. The results marked a clear improvement compared with 2024, when the company posted an earnings shock. Sales in the ramen segment, Nongshim’s core business, climbed 6.3% to 2.99 trillion won, driving overall growth.
Despite the improved performance, brokerages remained cautious. Of 10 research reports released after the earnings announcement, all maintained a “buy” rating, but five firms lowered their target prices, while the remaining five kept theirs unchanged.
Analysts who reduced their targets pointed to profitability concerns in the fourth quarter. KB Securities analyst Ryu Eun-hae said Nongshim’s fourth-quarter operating profit of 33.4 billion won met the lowered consensus but prompted a downward revision of the company’s 2026 earnings forecast, partly reflecting higher global marketing expenses and changes to a contract related to “K-pop Demon Hunters.” KB Securities cut its target price to 550,000 won from 570,000 won.
NH Investment & Securities analyst Joo Young-hoon also cited higher employee welfare and global marketing costs, noting that fourth-quarter operating profit fell short of the firm’s earlier estimate of 54.7 billion won. NH lowered its target price to 540,000 won from 560,000 won, though it added that Nongshim remains attractive from a valuation standpoint, with a price-to-earnings ratio of 13.1 times, below the three-year average of 14.8 times.
Weak performance in the U.S. market was another factor. Hanwha Investment & Securities analyst Han Yoo-jung noted that despite a 10% average price increase in July 2025, sales in the U.S. declined 1.8%, while expanded promotions and marketing expenses pushed the operating margin down to 4.2%, resulting in a 48.6% drop in North American operating profit. Hanwha lowered its target price to 550,000 won from 600,000 won.
Other brokerages also trimmed their targets, including DS Investment & Securities (600,000 won → 550,000 won) and Hyundai Motor Securities (580,000 won → 540,000 won).
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
