Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - UBS has upgraded Kakao Corp . (KS:035720) from Neutral to Buy, while significantly raising its price target to KRW73,000 from KRW45,000, citing improved earnings and expected revenue growth acceleration.
The South Korean internet company reported second-quarter operating profit of KRW186 billion, representing a 39% year-over-year increase and substantially exceeding the consensus estimate of KRW126 billion, according to UBS.
The earnings outperformance was primarily driven by profitability improvements at Kakao’s subsidiaries, with UBS highlighting marketing optimization at Piccoma and margin expansion at SM Entertainment as key contributors.
UBS expects revenue growth to reaccelerate beginning in the third quarter, initially led by subsidiaries, while the core advertising business is projected to benefit from a September messenger app revamp in the fourth quarter.
The investment bank also noted that Kakao has several artificial intelligence initiatives launching in the second half of 2025, which it views as providing longer-term growth potential despite the stock’s current valuation not being considered cheap.
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