IBK Securities, Krafton target price ↓… “Reflection of downward adjustment in earnings per share for next year”

IBK Investment & Securities announced on the 11th that it had lowered its target stock price for Krafton [259960] from 420,000 won to 300,000 won. The investment opinion was maintained at 'buy'.

Researcher Seunghoon Lee said, “Krafton’s performance in the third quarter of 2026 fell below the consensus (market average forecast, sales of KRW 1.1177 trillion, operating profit of KRW 271.5 billion),” and lowered the target stock price to reflect the downward adjustment of the estimated earnings per share (EPS) for 2027.

Krafton announced the previous day that sales in the third quarter increased 11.6% to KRW 971.4 billion, up 11.6% from the previous year, but operating profit decreased 35.5% to KRW 225 billion, and controlling net profit turned into a deficit with a loss of KRW 64.1 billion.

Researcher Lee explained, "The key cause of the decline in sales is the sharp decline in PC sales, which is due to the decline in paid content and the disappearance of the initial effect of Subnautica 2," adding, "On the other hand, the number of monthly active users (MAU) for PUBG PC and console maintained double-digit growth, and mobile also grew by 11.8% compared to the previous quarter."

In addition, operating expenses decreased compared to the previous quarter, but marketing expenses increased to 65 billion won due to participation in Gamescom, and in non-operating income, there was a foreign currency loss due to the weakening dollar.

However, the researcher emphasized that in the fourth quarter, PUBG PC performance will show a clear rebound thanks to collaboration with Bentley and IVE, and in the mobile sector, a low-capacity version of BGMI Air targeting low-end terminal users in emerging markets is scheduled to be released.

Researcher Lee predicted, "In 2027, key new pipelines such as 'Palworld Mobile', 'PUBG: DED.NET', and 'NO LAW' will be fully operational, which will serve as a momentum for top-line and profit growth."

He said, “The total annual shareholder return in 2026 is 917.2 billion won, which is 9.3% of the current market capitalization when including dividends and share buybacks and cancellations,” and added, “While a solid shareholder return plan supports the bottom of the stock price, there is a high possibility of performance improvement with the launch of the new product lineup next year.”

Krafton's current stock price is 216,500 won based on the previous trading day's closing price.