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Photo = Yonhap news |
[Alpha Biz= Paul Lee] SEOUL, June 20, 2025 — Samsung Securities has lowered its target price for Kia Corp. (000270.KQ) from KRW 130,000 to KRW 120,000, citing weaker Q2 earnings due to newly imposed U.S. tariffs. Despite the downgrade, the brokerage maintained a ‘Buy’ rating, citing the stock’s current valuation.
In a report released Thursday, analyst Eun-Young Lim stated that U.S. tariffs began impacting Kia’s cost structure in May and could cost the automaker KRW 250 billion per month, or approximately KRW 3 trillion annually.
She explained, “The wholesale price per unit in the U.S. is about USD 35,000, while the FOB (Free on Board) export price from Korea is USD 25,000. Applying a 25% tariff results in an estimated cost burden of KRW 8–9 million per unit.”
A renegotiation of tariff terms is expected in July, with Japan currently negotiating a sub-10% tariff rate. Korea is anticipated to enter talks after Japan, with a potential timeline set around July 9.
Price hikes in response to tariffs are likely to be reviewed by late Q3, Lim added. “Subaru raised prices by 5% in May, which led to a 7% year-on-year drop in sales, showing increased price sensitivity post-pandemic,” she noted.
“Financially weaker firms like Ford and some German automakers have already announced 2–3% price hikes from early July, and Tesla has increased Model X and S prices by 5–6%,” she added. Kia is expected to monitor the market before deciding on a price adjustment.
While short-term stock price correction is possible due to underwhelming second-quarter earnings, Samsung Securities believes much of the tariff risk has already been priced in. “The stock fell about 20% following the tariff announcement in early April,” Lim said.
“Looking ahead, Kia’s monthly market share trends in the U.S. and European EV markets will be the key driver of share price,” she concluded.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
