AmorePacific earnings won’t recover until post Q1 2021, says analyst

AmorePacific earnings won’t recover until post Q1 2021, says analyst

THE WHAT? An analyst writing for Business Korea has predicted that AmorePacific stock will struggle until earnings resume growth in the first quarter of 2021.

THE DETAILS Shinay Park of KB Securities said that, despite the K-beauty behemoth’s compound annual growth rate (CAGR) being revised down from 9.8 percent to 8.8 percent for the 2019 to 2026 period, it is maintaining its BUY status and target price of KRW190,000.

The analyst is estimating revenue of KRW1.11 trillion for AmorePacific, down 21 percent year-on-year thanks to poor travel retail sales and a drop in in-store traffic caused by the ongoing pandemic.

THE WHY? The analyst believes that AmorePacific’s share price already reflects 2020 earnings and uncertainties and that stock will rebound once earnings resume growth after the first quarter of 2021.

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