K-Pop’s Four Major Agencies See Sharp Stock Drops as Target Prices Are Uniformly Cut

The stock prices of South Korea’s four largest entertainment companies—SM Entertainment, YG Entertainment, HYBE, and JYP Entertainment—are all declining simultaneously. Securities firms have lowered their target prices for these companies across the board, citing falling album sales and gaps caused by key artists as primary reasons.

SM Entertainment’s stock has dropped by 35.0%, from a high of 132,400 won at the beginning of this year to 85,800 won, and it is now at roughly half its peak level of 155,100 won recorded in August last year. YG Entertainment’s situation is even more severe, with its stock falling by 51.3%, from 105,500 won at the start of the year to 51,300 won. HYBE’s stock has dropped by 25.61% compared to the beginning of the year, while JYP Entertainment’s has fallen by 17.77%.

UJ Investment & Securities reduced SM Entertainment’s target price by 18.8%, from 160,000 won to 130,000 won. Hanwha Investment & Securities and Shinhan Investment & Securities also lowered it to 120,000 won and 130,000 won respectively. YG Entertainment’s target price was cut from 90,000 won to 70,000 won, while HYBE’s target price was reduced by 15.6%, from 450,000 won to 380,000 won. JYP Entertainment’s target price was also adjusted downward by 9.3%, from 97,000 won to 88,000 won.

SM Entertainment is criticized for lacking major artists capable of expanding its business scale and for underperforming in the North American market. UJ Investment & Securities projected sales of 251.6 billion won and operating profits of 35.4 billion won for the first quarter, but pointed out that the company lacks artists capable of attracting large audiences as a key limitation.

YG Entertainment attributes its below-expected performance primarily to the absence of BLACKPINK’s tour activities. While additional performances by BLACKPINK were anticipated in the first half of the year, no new tour schedules have been announced since the release of their latest album. It is expected that increased costs related to content production and sales management due to the release of new albums by BABYMONSTER and TREASURE in the second quarter will put further pressure on profit margins.

HYBE is projected to record sales of 637.7 billion won and operating profits of 39.3 billion won for the first quarter, but these figures are expected to fall short of market consensus. Although sales from BTS-related content and strong performance in official merchandise (MD) sales are expected to drive growth, there are analyses suggesting that rising cost ratios stem from an increasing reliance on indirect sales through external partnerships.

JYP Entertainment’s projected sales for the first quarter are 151 billion won, with operating profits estimated at 22 billion won—both figures well below market consensus. With mainly solo artists such as DAY6’s Wonpil and IVE’s Yuna active, album sales are expected to decline significantly. As the contract renewal season for TWICE approaches and STRAY KIDS enlist in the military, there is an urgent need to demonstrate the growth potential of next-generation artists.

However, analysts have suggested a possibility of performance recovery after the second quarter. HYBE is set to launch large-scale world tours starting in the second quarter, while YG Entertainment’s world tour by BABYMONSTER, tour and Sub-unit activities by TREASURE, and world tour by BIGBANG are expected to contribute to improved financial results in the second half of the year.