On Thursday, Goldman Sachs (NYSE:GS) adjusted its outlook on shares of SK Telecom (017670:KS) (NYSE:SKM), raising the price target to KRW64,000 from the previous KRW62,000, while reiterating a Buy rating on the stock. The firm's analysis suggests that the company's second quarter earnings for 2024 are anticipated to align with the consensus.
The assessment by Goldman Sachs indicates that recent modifications in handset subsidy regulations, which now permit larger mobile number portability (MNP) subsidies, have had a minimal effect. Consequently, stable trends are expected in SK Telecom's wireless revenue and marketing expenses. Moreover, the company's IPTV/Broadband segment is projected to continue showing low-to-mid single digit year-over-year growth.
Goldman Sachs also foresees an acceleration in SK Telecom's Data Center and Cloud revenue. The firm updated its earnings estimates for the company, taking into account the first quarter results as well as a more favorable view of SK Telecom's ability to control costs.
Furthermore, Goldman Sachs has introduced its earnings estimates for 2026, and as part of their valuation method, they have shifted their focus to an average of the 2024/25 earnings, up from just 2024. This adjustment has resulted in the refreshed price target of KRW64,000.
The ongoing confidence in SK Telecom by Goldman Sachs is rooted in the company's consistent performance and its ability to adapt to regulatory changes while effectively managing costs. The firm's analysis suggests a continued positive trajectory for SK Telecom's financials moving forward.
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