Kiwoom Securities on the 6th maintained its buy rating on JYP Entertainment (KOSPI: 035900) while cutting its 12-month target price from 100,000 won to 81,000 won.
The reduction reflects a downward revision to the target earnings multiple applied across the entertainment sector. Sustained capital flows into semiconductors and select other sectors have compressed valuations for K-pop and broader entertainment stocks. Kiwoom has lowered its sector target price-to-earnings ratio to 20 times. JYP Entertainment's five-year average P/E stood at 28.4 times, but its projected 2027 P/E has fallen as low as 12 times. At the current share price of 53,200 won, the revised target implies upside of 52.3%.
Second-quarter results are expected to come in marginally below consensus. Kiwoom forecasts consolidated revenue of 210.8bn won for the quarter, up 13% from the previous quarter but down 2% year on year, with operating profit of 38.8bn won, up 16% quarter on quarter but down 27% year on year. The shortfall is attributed to several timing-related factors: a delay in recognising excess settlement income from TWICE, a deferral of merchandise revenue tied to a Stray Kids fan meeting, and a more conservative production stance for a global character pop-up event.
Kiwoom views these as temporary timing issues rather than structural setbacks, and has left its full-year estimates unchanged. It forecasts annual revenue of 871.1bn won and operating profit of 173.9bn won for 2026.
Stray Kids is identified as the pivotal catalyst for the second half. The group has a comeback and a major world tour scheduled, and Kiwoom notes that the contractual terms governing their Western tour carry a favourable profit-sharing structure, making them a powerful driver for upgrades to company-wide estimates. The planned debut of a new girl group towards year-end is cited as an additional upside factor.
Total concert attendance for 2026 is estimated at 3.221 million across 149 shows. Merchandise revenue is forecast to grow from 234.1bn won in 2026 to 299.9bn won in 2027.