Kyobo Securities raised its target price for KT&G on the 7th from 190,000 won to 250,000 won, while maintaining a "buy" recommendation on the stock.
The new target was derived by applying a price-to-earnings multiple of 20 times to the company's 12-month forward earnings per share — a valuation in line with that of global tobacco giant Philip Morris International.
For the second quarter, Kyobo estimates KT&G will report consolidated revenue of 1.6742 trillion won, up 8% year on year, and operating profit of 402.5 billion won, up 15%, both modestly ahead of market consensus.
Within that, the combined tobacco division — covering next-generation products (NGP) and conventional cigarettes — is forecast to generate revenue of 1.2048 trillion won (up 11%) and operating profit of 373.6 billion won (up 16%). Domestic NGP sales are expected to grow 19% year on year, while overseas NGP revenue is projected to rise 36% to 75.9 billion won.
The health supplements segment is forecast to contribute revenue of 223.6 billion won (up 1%) and operating profit of 7.1 billion won (up 15%), partly reflecting the benefit of domestic promotional campaigns tied to Family Month and high-cost energy support programmes.
Kyobo also noted that foreign investors' ownership of KT&G has expanded from around 42% at the start of this year to above 51%, viewing this as a positive signal that the valuation discount relative to global tobacco peers could continue to narrow.
For the full year 2026, Kyobo projects revenue of 7.027 trillion won (up 6.8%) and operating profit of 1.5423 trillion won (up 14.8%). KT&G's share price stood at 172,600 won at the time of publication.