LS SECURITIES raised its target price for Korean Air to 37,000 won. This adjustment comes as the company's second-quarter performance exceeded market expectations and amid the ongoing increase in air travel demand. The investment opinion remains 'buy.'
On the 15th, LS SECURITIES projected that Korean Air's standalone revenue for the second quarter would have increased by 4.3% year-over-year to approximately 3.98 trillion won. Additionally, it estimated that operating profit would have exceeded market expectations of 382.6 billion won, reaching 399 billion won.
Lee Jae-hyuk, a researcher at LS SECURITIES, noted, "Despite the effects of the Fair Trade Commission's corrective measures related to the merger with Asiana Airlines and the off-peak season, the company's quarterly average fare remained robust at 124 won per kilometer," adding that "performance on routes to China has also expanded."
The expense environment has shown signs of improvement compared to the previous quarter, according to the researcher. He stated, "As the decline in international oil prices and the effect of the falling won-dollar exchange rate became pronounced over the quarter, the company's average refueling cost per barrel decreased by 18% year-over-year."
LS SECURITIES also forecasted that the operating environment for Korean Air will continue to improve. This expectation is based on the seasonal effects of the summer vacation peak, stabilization of fares on long-haul routes, and increased operational efficiency due to the introduction of new aircraft.
The researcher mentioned, "We maintain our preference for Korean Air as the top pick within the airline sector," noting that "amid a surge in air travel demand, a notable re-rating of stock prices is evident across the global airline industry."