Hana Securities raised its target price for SK Innovation (KOSPI: 096770) from 170,000 won to 200,000 won on the 16th, while maintaining its "Buy" recommendation.
The brokerage estimates SK Innovation's second-quarter operating profit at 1.809 trillion won — 21% above the market consensus of 1.494 trillion won. Although that would represent a 16% decline from the previous quarter, it marks a return to profit compared with the same period a year earlier.
By division, the lubricants business is expected to lead performance, with operating profit of 951 billion won and an operating margin of 41%. The petroleum division is forecast to post operating profit of 882 billion won, weighed down by inventory-related losses, a negative lagging effect from falling crude oil prices, and losses from domestic price caps. The operating loss at SK On, the group's electric-vehicle battery subsidiary, is projected to narrow by 76.4 billion won quarter-on-quarter to 272.7 billion won.
For the full year, Hana Securities projects a record-high operating profit of 6.525 trillion won — a 1,505% increase on the prior year. The brokerage has also revised its 2026–27 earnings estimates upward by approximately 60%.
The new target price was derived by applying a price-to-book ratio of 1.2 times — the peak valuation recorded during the 2017–18 industry boom — to an average book value per share of 160,000 won forecast for 2026–27.
A supply shock in the global lubricants market also underpins the upgraded outlook. Damage to the Pearl GTL facility in Qatar is expected to keep at least 10% of global Group III base oil supply offline until at least the first half of 2027. SK Innovation's base oil production capacity stands at roughly 80,000 barrels per day, entirely composed of Group III — the premium segment most affected by the disruption.
Hana Securities also highlighted SK Innovation's position as the second-largest shareholder in TerraPower, a next-generation small modular reactor (SMR) developer, with a stake of approximately 5%. TerraPower is targeting completion of its first unit in 2030 and commercial operations in 2031. The company has secured orders for 12 projects in the United States, eight of which are in collaboration with Meta.
Hana Securities estimates the value of SK Innovation's 5% stake in TerraPower at around 600 billion won based on implied market capitalisation. Compared with listed SMR peers — X-Energy, valued at $9.1 billion (approximately 13 trillion won), and Oklo, valued at $7.9 billion (approximately 12 trillion won) — TerraPower's earlier completion timeline suggests its valuation could have further room to rise, the brokerage argues.
SK Innovation's shares closed at 117,000 won on 15th July.