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(Photo= Yonhap news) |
[Alpha Biz= Reporter Kim Sangjin] KB Securities has revised down the target price for S-OIL from KRW 88,000 to KRW 84,000, following their estimation that S-OIL's operating profit for the second and fourth quarters of this year will likely be in the range of KRW 100 billion. They anticipate that this figure will significantly undercut consensus estimates.
On the 22nd, KB Securities stated, "With a sharp decline in oil prices and refining margins from May to June, it is expected that upside potential will be limited until next year." The government has previously urged oil refineries, including S-OIL, to refrain from raising petroleum prices beyond the amount offset by the reduction in fuel taxes, which will be adjusted on the 1st of next month.
KB Securities further added, "We estimate S-OIL's operating profit to sharply decline by 78% quarter-on-quarter to KRW 100.5 billion," and noted, "This is significantly below the consensus estimate of KRW 433.5 billion." Despite the downturn in refining margins during the second quarter, the company expects solid performance in petrochemicals and lubricants.
Looking ahead, KB Securities cautioned, "Upside potential in oil prices and refining margins is expected to be limited until next year," but also advised, "There is a scenario for market improvement, so maintaining an appropriate allocation is recommended."
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
