JPMorgan analyst Stanley Yang has downgraded SK Telecom (SKM, Financial) from an Overweight to a Neutral rating, reducing its price target from KRW 66,000 to KRW 58,000. This adjustment is based on anticipated financial setbacks and regulatory risks arising from a significant data breach at SK Telecom. The analyst has also revised the company's future financial expectations, lowering the 2025 and 2026 parent wireless revenue predictions by 3% and 5%, respectively. Additionally, earnings per share (EPS) forecasts have been cut by 10% for 2025 and 11% for 2026, reflecting the potential ongoing impact of the breach.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 1 analysts, the average target price for SK Telecom Co Ltd (SKM, Financial) is $25.08 with a high estimate of $25.08 and a low estimate of $25.08. The average target implies an upside of 23.78% from the current price of $20.26. More detailed estimate data can be found on the SK Telecom Co Ltd (SKM) Forecast page.
Based on the consensus recommendation from 1 brokerage firms, SK Telecom Co Ltd's (SKM, Financial) average brokerage recommendation is currently 3.0, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for SK Telecom Co Ltd (SKM, Financial) in one year is $20.84, suggesting a upside of 2.86% from the current price of $20.26. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the SK Telecom Co Ltd (SKM) Summary page.
SKM Key Business Developments
Release Date: February 12, 2025
- Consolidated Revenue: KRW17,940.6 billion, up 1.9% year-over-year.
- Operating Profit: Grew 4% year-over-year with an operating margin exceeding 10%.
- Operating Income: KRW1,823.4 billion.
- Net Income: KRW1,438.8 billion, up 25.6% year-over-year.
- AI-Related Revenue Growth: 19% year-over-year.
- Dividend Per Share (DPS) for 2024: KRW3,540, including a quarterly dividend of KRW2,490.
- 2025 Revenue Target: KRW17.8 trillion, approximately 1% growth year-over-year on a normalized basis.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SK Telecom Co Ltd (SKM, Financial) reported a 4% year-over-year growth in consolidated operating profit, with an operating profit margin exceeding 10%.
- Consolidated revenue increased by 1.9% year-over-year to KRW17,940.6 billion, driven by growth in fixed and mobile, enterprise, and AI business areas.
- Net income rose by 25.6% year-over-year to KRW1,438.8 billion, attributed to business portfolio restructuring and asset efficiency enhancements.
- AI-related revenue grew by 19% year-over-year, with strategic investments in AI partnerships and the launch of SKT GPU-as-a-Service.
- The company maintained a stable dividend per share (DPS) of KRW3,540, reflecting a commitment to shareholder returns despite economic uncertainties.
Negative Points
- The MNO business experienced a slight slowdown in top-line growth, despite customer-friendly roaming services.
- There are concerns about the future stock price trend due to uncertainty surrounding long-term dividend payouts.
- Marketing costs have been reduced, but the market remains competitive, especially with the lifting of the handset subsidy ban.
- The AI business, while showing growth, still represents a small portion of total revenue, and tangible results are yet to be fully realized.
- The company faces significant economic, industrial, and political changes, both domestically and globally, which could impact future performance.
