How are energy investors positioned?
On Monday, Goldman Sachs upgraded KT Corp . (030200:KS) (NYSE: NYSE:KT) stock from Neutral to Buy, increasing the price target to KRW 59,000 from KRW 49,000. The upgrade comes as Goldman Sachs analysts recognize KT Corp.’s significant strides in enhancing shareholder returns, particularly through the effective management of its non-telecommunications assets.
The analysts noted that while growth in the traditional telecommunications sector remains limited, KT Corp. has demonstrated a robust strategy for boosting shareholder value. This strategy includes the optimization of its non-telco assets, which is expected to continue driving the stock’s re-rating.
A key highlight of KT Corp.’s strategy is the anticipated revenue from its real estate development project in Gwangjin-gu. In 2025, the project is expected to generate approximately KRW 900 billion in sales. This revenue is seen as a critical funding source for this year’s KRW 250 billion treasury buyback, which is part of KT’s four-year KRW 1 trillion buyback program.
Goldman Sachs analysts also pointed out KT Corp.’s strong cost control measures, focusing on labor and marketing expenses. The company’s plans to divest non-core, low-profitability assets are also expected to contribute to improved shareholder returns. This disciplined approach, combined with the firm’s emphasis on shareholder value, could potentially lead to further gains through dividends or additional buybacks.
The upgraded rating and heightened price target reflect Goldman Sachs’ confidence in KT Corp.’s continued commitment to shareholder returns and its strategic initiatives aimed at optimizing its asset portfolio.
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