JPMorgan lifts Amorepacific stock rating, raises target to KRW120,000

On Thursday, JPMorgan analyst Simon Han upgraded Amorepacific Corp (KS:090430:KS) (OTC:AMRPF) stock from Underweight to Neutral and increased the price target to KRW120,000 from KRW99,000. The revision comes after the company reported first-quarter operating profits that exceeded market expectations by 14%. This performance was attributed to several factors, including a return to profitability in China after eight consecutive quarters of losses, strong sales in North America and the EMEA region, and better-than-expected domestic operating profit margins, despite a significant one-time employee incentive provision.

Amorepacific’s success in the western markets was highlighted as particularly encouraging, with the Laneige brand outperforming other K-beauty brands. The company’s diversified product offerings and strong brand equity are expected to drive a 30% year-over-year top-line growth for 2025. Additionally, Amorepacific has developed a solid business model in these regions, leveraging the Sephora channel to ensure growth for its newly launched brands, including Aestura.

The report also noted that the skincare brand COSRX experienced a 35% year-over-year decline in sales, which the analyst believes is now reflected in the current share price, indicating limited downside risk moving forward. Despite the disappointment with COSRX, the overall sentiment for Amorepacific remains positive due to its robust momentum in the western market and the company’s strategic positioning.

The turnaround in China was marked as a positive surprise, but JPMorgan emphasized the need to monitor the sustainability of Amorepacific’s growth and margins in the competitive Chinese market. The company’s ability to maintain profitability in China will be an important factor for future performance assessments.

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