[THE INVESTOR] Nexen Tire will be hurt as its major market North America slows down, said NH Investment and Securities on Nov. 28, lowering the target price to 16,000 won (US$14.75) from 17,000 won.
Analyst Cho Su-hong adjusted its fourth-quarter earnings estimates to 496.3 billion won for revenue and 49.7 billion won for operating profit. The market condition in North America will not worsen, however, and sales of tires will maintain the uptrend in quarterly profits, forecast the analyst.
Its growth potential remains solid as it will begin operating the Czech factory in next year and expand manufacturing capacity, which is positive, noted Cho.
Considering that the tire maker will grow in size in earnest from 2019, its current stock price at 8.1 times its price-earnings ratio is low for mid- to long-term investment, said the analyst maintaining a “buy” recommendation.
By Hwang You-mee (firstname.lastname@example.org)