Target price cuts pile up for JYP Entertainment as shares slide from 140,000 won peak to 30,000 won range

"I almost got burned trusting Park Jin-young." — investor

"I have no money left to average down." — JYP investor

Target price cuts for JYP Entertainment, the label founded by Park Jin-young, are piling up from brokerages, making it one of the most downgraded stocks in recent research notes.

Eugene Investment & Securities recently cut its target price for JYP by 23.1 percent, from 65,000 won to 50,000 won, in a research note titled "JYP: Lean Times Ahead," forecasting that the company's earnings will contract this year. The brokerage cited a slowdown in Stray Kids' performances and album activity, along with concerns about a future earnings gap stemming from Twice's contract renewal and some members' mandatory military service.

"Revenue gaps from major artists are approaching fast, making rapid growth from newer, junior artists an urgent necessity," said Lee Hyun-ji, an analyst at Eugene Investment & Securities. "It is disappointing that recent album sales from those junior artists have been underwhelming."

Eugene Investment & Securities projected JYP's third-quarter sales at 219.7 billion won and operating profit at 38.4 billion won, down 5.6 percent and 5.8 percent, respectively, from the same period a year earlier. The projected operating profit falls short of the market consensus of 42 billion won.

Lee Ki-hoon, an analyst at Hana Securities, also cut his target price for JYP to 49,000 won. "The earnings-decline cycle we had feared, driven by revenue gaps from key intellectual properties, has arrived faster than expected," he said. "The stock appears undervalued at around 13 times its projected 2027 price-to-earnings ratio, but a valuation re-rating is unlikely until growth drivers are confirmed."

Sangsangin Investment & Securities lowered its target price from 60,000 won to 52,000 won, and SK Securities cut its target from 75,000 won to 66,000 won, adding to the wave of downgrade reports hitting the stock.

Park Jin-young appeared on the YouTube channel Shuka World in November 2023 and said it was the right time to buy JYP shares. "If I had any spare money, I would absolutely buy shares in my own company," he said at the time. "Don't think about one year from now — buy with three or five years in mind."

Investors who took Park at his word have suffered steep losses. Three years on, the share price has more than halved. JYP stock, which was trading in the 90,000 won range when Park made his remarks, has plunged to the 30,000 won range, hitting a record low. The stock closed at 36,850 won ($28) on Friday. At its peak, JYP shares traded above 140,000 won. Park's own stake in the company is estimated to have lost more than 100 billion won ($75.5 million) in value.