Input 2021.01.21 16:24 | Revision 2021.01.21 16:26
Researchers (analysts) are deepening their concerns as Kia Motors jumps to the top 10 company in the market cap thanks to the good performance of Apple cars and exceeds the target price set by a securities company. This is because it has become difficult to decide whether to adjust the target price every time due to the possibility of a favorable outcome, or whether to watch more as it judges that it is a short term overheating.
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If the current stock price is higher than the target price, the current report can be interpreted as saying’Sell’, even though the auto industry is rising to the right. Analysts who want to avoid this burden will raise their stock price-to-earnings ratio (PER) and target price by attaching verbose reasons.
The target price is the highest stock price that a stock is projected to reach within 12 months. The target price is calculated by the analyst in charge by synthesizing various indicators such as PER, net asset ratio (PBR), and buying tax by investor. If it is a stock with growth potential, it is usually raised more than the current stock price. In the industry, the target price is regarded as’analyst’s self-expression’.
In fact, Kia Motors’ closing price (87,600 won) on the 20th has already surpassed seven out of nine Kia Motors targets proposed by securities companies from December last year to the last two months. Kia Motors has soared since the 19th, as news of Kia’s rapid rise from the Hyundai Motor Group as Apple’s EV production partner. On the 19th, the stock price of Kia Motors surpassed 80,000 won for the first time since June 20, 2012. On this day, the market went up to 93,200 won.
Among Kia Motors’ target prices, Shinyoung Securities’ target price, which was released on this day, was the highest with 100,000 won, and Ebest Investment Securities’ target price of 75,000 won, which was released on December 28 last year, was the lowest. Of these, KB Securities has hurriedly raised its target price, which was set at 72,000 won in December last year, to 86,000 won on the 12th. Except for the target price of Shinyoung Securities, all target prices suggested by securities companies are those that came before Kia Motors’ Apple car production.
Analysts also complained that it was difficult to determine whether it would be right to correct the target price or watch more. It is difficult to predict this volatility as stocks soar as the liquidity overflows in the market. Other analysts also said, “I have to first judge whether the stock is overheated or not, but it is difficult to raise the target price right away because it may be adjusted after rising too much at once.”
In addition, analysts are agonizing about the automobile industry itself, which has been changed by electric vehicles such as Tesla and Apple cars. An official from a financial investment industry said, “Analysts are contemplating whether the automobile industry is a typical business cycle (cyclical) industry, or whether the market really changes and goes to the electric vehicle and IT platform market that Tesla has made.” I changed my attitude toward Tesla, which was told to’sell’, to’buy’,” he said.
Analyst Adam Jonas Morgan Stanley, who was previously known as a leading Tesla pessimist on Wall Street in the United States, has steadily raised the Tesla target price since the beginning of last year, saying, “There is nothing flawless for Tesla.” On the 5th (local time), the Tesla target price was raised from $540 to $810. At the time, this was an estimate that far exceeded the monthly average of $437.15. As of the 20th, Tesla’s share price was $850.45.
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