SK and IBK cut Krafton targets to 300,000 won after Q3 profit miss

SK Securities and IBK Securities cut their price targets for Krafton to 300,000 won in Nov. 11 reports after its third-quarter profit miss, while retaining Buy ratings. The cuts reflected lower earnings expectations, but the brokerages took different approaches to valuation.

The revised target at IBK was 28.6% below its previous 420,000 won estimate. At SK, the adjustment combined earnings revisions following changes to new-game schedules with a lower valuation multiple to reflect greater dependence on PUBG.

What drove the profit miss?

Operating profit for July to September fell 35.5% year-on-year to 225.0 billion won. That was 17.1% below the 271.5 billion won consensus estimate cited by IBK. Revenue rose 11.6% year-on-year to 971.4 billion won, according to Krafton’s results release.

PC revenue fell 32.5% year-on-year to 238.9 billion won. Separately, the company reported costs associated with gamescom participation and other activities.

Why cut targets while retaining Buy?

Greater dependence on PUBG led SK to lower its target price-to-earnings ratio to 12.9 times. The brokerage cut both its earnings estimates and the multiple used to value those earnings.

In contrast, IBK lowered its 2027 earnings-per-share forecast while applying the upper end of Krafton’s 12-month forward P/E range over the preceding year. The earnings forecast refers to the year being valued; the historical range describes the multiple used in that valuation.

Its retained Buy rating reflected expectations for shareholder returns and earnings improvement from new titles. Those expectations accompanied a lower earnings forecast, rather than an upgrade to its profit assumptions.

What do returns and release plans cover?

An additional 300 billion won share buyback and full cancellation plan, approved by Krafton’s board on Nov. 3, would bring the company’s announced shareholder returns for 2026 to 917.2 billion won. The total includes the newly announced program and is not an amount already returned to shareholders. Buying back shares and canceling those same shares are parts of one program, rather than two separate cash payments.

BGMI Air, a lightweight version for emerging markets, is scheduled to launch on December 10, 2026, according to Krafton. The company is also preparing a content update for PUBG’s 10th anniversary in 2027. Separately, IBK included Palworld Mobile in its expected 2027 lineup; that is the brokerage’s forecast, rather than a confirmed company launch date.

Subnautica 2 is already available in Early Access. Krafton plans a major Early Access 2.0 update at the end of 2026 as it prepares for the full launch.