SM Entertainment (SME) reported results that exceeded market expectations, leading securities firms to consecutively raise their target prices. With the debut of the rookie girl group Hearts2Hearts this year and plans to introduce a rookie boy group in 2026, there are also projections that growth will continue.
Lee Hwa-jeong, a researcher at NH Investment & Securities, presented a 'buy' investment opinion for SME along with a target price of 130,000 won on the 11th. This is 23.8% higher than the previous target price of 105,000 won and 40.8% above SME's closing price of 92,300 won the previous day.
SME's results, published after the market close the previous day, raised expectations. In the fourth quarter of last year (October to December), SME recorded consolidated revenue of 273.8 billion won and an operating profit of 33.9 billion won, surpassing the market's expected quarterly operating profit of 21.4 billion won.
The researcher noted, "With the global expansion of key artists like Aespa and NCT Dream, along with the revenue contributions of lower-tier artists like RISE and NCT Wish, SME is likely to achieve its consolidated operating profit target of 133 billion won this year."
Other securities firms also adjusted their target prices upward. ▲ Kiwoom · Daishin Securities 110,000 won → 120,000 won ▲ Samsung Securities 96,000 won → 110,000 won ▲ Korea Investment · Hana Securities 100,000 won → 110,000 won, etc.
Securities firms evaluated that the remarkable growth of MD (planned products) and the alleviation of performance burdens from subsidiaries were behind SME's ability to achieve 'surprising results.' Lee Nam-soo, a researcher at Kiwoom Securities, stated, "As improvements linked to artist activities are showing, concerns over performance deterioration due to subsidiaries will ease in the future."
The fact that a rookie group is set to debut was also pointed out as a driving force for the stock price increase. Lee Gi-hun, a researcher at Hana Securities, noted, "This month, rookie girl group Hearts2Hearts will debut, and if successful, an expansion of the new lineup alongside Aespa and RISE will occur."
Im Soo-jin, a researcher at Daishin Securities, said, "The male trainees SMTR25, who received the most attention during the recent 30th anniversary SM Town concert, plan to engage in long-term promotion through participation in a global tour and content production this year," adding, "They are rapidly forming a fandom even before their debut, making a successful debut in 2026 expected."