HYBE's Weaker-Than-Estimated 1Q Operating Profit Likely Priced In — Market Talk

HYBE's likely weaker-than-estimated 1Q profit has probably been priced into its shares, says CGS International's Jiwoo Oh in a note. The recognition of album-production costs for boy band BTS and a higher artist revenue-sharing ratio likely weighed on the South Korean entertainment company's 1Q operating profit despite robust revenue growth, the analyst said. However, investors are likely to focus on 2Q results instead, as that quarter will reflect BTS's concert tour. She reckons HYBE's 2026 earnings momentum remains strong as key album and streaming indicators continue to exceed her expectations. CGSI trims its target price to 400,000 won from 480,000 won due to lower earnings-per-share estimates and a revised valuation, but maintains an add rating. Shares closed 0.6% lower at 254,000 won. (megan.cheah@wsj.com)