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Investing.com - Goldman Sachs initiated coverage on Hyundai Motor (KS:005380) (OTC:HYMLF) with a Buy rating and a price target of KRW300,000.00.
The South Korean automaker has underperformed the Kospi index by 32 percentage points year-to-date, on track for its biggest underperformance relative to the index since 2006, according to Goldman Sachs.
Goldman Sachs notes that Hyundai’s share price increased by more than 43% in the first half of 2024 despite consensus operating profit rising only 5%, attributing the difference to multiple expansion. By late June 2024, Hyundai’s one-year forward price-to-earnings ratio traded at a 5% premium to legacy auto peers, but it now trades at a 38% discount.
The investment bank’s operating profit estimates for Hyundai are 6% and 4% below consensus for 2025 and 2026, respectively, which Goldman Sachs suggests may be due to some estimates not fully accounting for tariff impacts.
Despite ongoing tariff concerns, Goldman Sachs observes that Hyundai’s share price has rebounded 21% from its year-to-date lows reached on April 11, even as one-year forward consensus operating profit forecasts were reduced by 3%, indicating the market may be looking beyond tariff issues.
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