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POSCO (PKX)
NYSE:PKX
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POSCO (PKX) AI Stock Analysis

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PKX

POSCO

(NYSE:PKX)

Rating:71Outperform
Price Target:
$63.00
▲(12.98% Upside)
POSCO's stock score reflects a balance of strong financial stability and positive strategic initiatives against the backdrop of operational challenges and high valuation concerns. The recent earnings call provided positive momentum with improved financial results and strategic plans, but technical indicators suggest caution due to overbought conditions.

POSCO (PKX) vs. SPDR S&P 500 ETF (SPY)

POSCO Business Overview & Revenue Model

Company DescriptionPOSCO (PKX) is a South Korean multinational corporation primarily engaged in the steel manufacturing sector. Founded in 1968, it has grown to become one of the world's largest steel producers, operating in various segments including steel production, processing, and distribution. POSCO also invests in other sectors such as construction, engineering, and energy, and is recognized for its commitment to innovation and sustainable practices in the steel industry, offering a range of products including hot-rolled, cold-rolled, and coated steel products.
How the Company Makes MoneyPOSCO generates revenue primarily through the sale of steel products, which constitute the majority of its earnings. The company produces a wide array of steel grades used in construction, automotive, shipbuilding, and various industrial applications. Its revenue model is supported by a diversified portfolio that includes flat and long steel products, as well as specialized steel products for specific industries. In addition to steel manufacturing, POSCO earns money through its investments in steel processing and distribution, engineering services, and joint ventures in overseas markets. Key partnerships with major automobile and construction firms also contribute significantly to its revenue, as these sectors are major consumers of steel. Furthermore, POSCO's focus on research and development allows it to innovate and introduce new products, thereby enhancing its competitive edge and market share.

POSCO Earnings Call Summary

Earnings Call Date:Jul 31, 2025
(Q1-2025)
|
% Change Since: 0.90%|
Next Earnings Date:Oct 27, 2025
Earnings Call Sentiment Neutral
POSCO Holdings' Q1 2025 earnings call highlights a recovery in revenue and operating profit, strategic partnerships, and successful asset divestiture, but also reveals ongoing challenges in energy materials, the Chinese market, and trade barriers. The overall sentiment is slightly optimistic due to positive developments, but tempered by significant challenges.
Q1-2025 Updates
Positive Updates
Revenue and Operating Profit Rebound
POSCO Holdings' Q1 2025 consolidated revenue reached KRW17.4 trillion, with an operating profit of KRW570 billion, recovering from KRW95 billion in the previous quarter.
Energy Materials Turnaround
POSCO Future M reported increased sales volume in cathode materials, resulting in operating profit improvement and a turnaround in Q1.
Strategic MOU with Hyundai Motor Group
POSCO signed an MOU with Hyundai Motor Group to jointly invest in a US steelmaking plant and develop next-generation battery materials.
Asset Divestiture and Cash Generation
In Q1 2025, POSCO divested six assets, raising KRW286.6 billion, totaling KRW949.1 billion in cash generated since last year through restructuring efforts.
Progress in Overseas Steel Business
Overseas steel business showed improvements, with strong performance in engine operations and reduced losses at the Zhangjiagang plant in China.
Negative Updates
Ongoing Energy Materials Deficit
Despite a reduction in losses, the energy materials segment reported an operating deficit of KRW100 billion due to ramp-up of new plants and investment losses.
Challenges in the Chinese Market
Continued underperformance in Southeast Asia and restructuring challenges in China, particularly with the PZSS office, which has reported deficits for 12 consecutive terms.
Impact of Trade Barriers
Intensified trade barriers and tariffs are affecting POSCO's sales volume and plans, particularly in the automotive and overseas steel segments.
Lithium Price Uncertainty
Delayed recovery in lithium prices and market sluggishness have led to postponed completion of new facilities and uncertainty in future pricing.
Company Guidance
During POSCO Holdings' earnings call for the first quarter of 2025, several financial metrics were highlighted. The company reported consolidated revenue of KRW17.4 trillion and an operating profit of KRW570 billion. EBITDA reached KRW1.6 trillion, with consolidated CapEx for the quarter amounting to KRW1.5 trillion. Operating profit margins improved across business segments, with the industrial segment's margin increasing from 2.3% to 3% quarter-over-quarter. Specifically, POSCO's operating profit margin recovered to 3.9%. Despite a 5.5% decline in crude steel output due to maintenance, efforts to stabilize raw materials costs and enhance cost-saving measures resulted in an improved operating margin. The company also reported divesting six assets in Q1, generating KRW286.6 billion, and announced a CapEx plan of KRW8.8 trillion for the year, with allocations to steel, energy materials, and infrastructure. The call also detailed strategic initiatives, including a memorandum of understanding with Hyundai Motor Group to invest in a U.S. steelmaking plant and develop next-generation battery materials, in compliance with USMCA rules. The call concluded with guidance on ongoing restructuring efforts and the potential for positive market developments.

POSCO Financial Statement Overview

Summary
POSCO's financial performance demonstrates strong equity and manageable debt levels, which provide stability. However, the declining revenue and profit margins signal operational challenges, and cash flow constraints highlight the need for strategic improvements to enhance liquidity and profitability.
Income Statement
75
Positive
POSCO's income statement shows mixed results with a declining revenue trend from 2022 to 2024, decreasing from 84.75 trillion KRW to 72.69 trillion KRW, indicating a negative revenue growth rate. The gross profit margin decreased from 9.02% in 2022 to 7.41% in 2024, and the net profit margin declined from 3.72% in 2022 to 1.51% in 2024, reflecting pressure on profitability. EBIT and EBITDA margins have also decreased, highlighting operational challenges. Despite these declines, the company maintains positive net income and gross profit.
Balance Sheet
80
Positive
The balance sheet of POSCO is strong with a stable equity ratio and a manageable debt-to-equity ratio of 0.49 in 2024. The company has a robust stockholders' equity of 55.39 trillion KRW, providing a solid buffer against liabilities. While total debt has increased slightly over the years, it remains within reasonable limits. The return on equity has decreased from 6.01% in 2022 to 1.98% in 2024, indicating reduced profitability from equity.
Cash Flow
65
Positive
POSCO's cash flow statement reflects challenges with free cash flow consistently negative in 2023 and 2024. The operating cash flow to net income ratio improved slightly to 6.09 in 2024, indicating efficient cash generation relative to net income. However, the free cash flow to net income ratio remains negative, suggesting capital expenditure outpaces cash generation. The free cash flow growth rate is negative, highlighting the need for improving cash flow management.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue72.07T72.69T77.06T84.75T76.33T57.79T
Gross Profit22.16T5.39T6.32T7.65T11.88T4.72T
EBITDA4.20T6.11T7.26T8.53T12.79T6.18T
Net Income856.61B1.09T1.70T3.16T6.61T1.58T
Balance Sheet
Total Assets10.00T>10.00T>10.00T>98.41T91.47T79.09T
Cash, Cash Equivalents and Short-Term Investments15.50T14.80T17.91T18.74T18.16T16.46T
Total Debt0.0026.90T25.90T25.13T22.52T20.50T
Total Liabilities40.45T41.95T41.89T40.15T36.67T31.41T
Stockholders Equity55.58T55.39T54.15T52.51T50.43T44.33T
Cash Flow
Free Cash Flow-377.53B-1.01T-1.06T766.31B2.75T5.19T
Operating Cash Flow7.05T6.66T6.17T6.19T6.26T8.69T
Investing Cash Flow-5.00T-4.49T-7.39T-4.22T-5.58T-6.26T
Financing Cash Flow-2.35T-2.30T-178.59B1.32T-768.67B-1.09T

POSCO Technical Analysis

Technical Analysis Sentiment
Positive
Last Price55.76
Price Trends
50DMA
54.01
Positive
100DMA
49.74
Positive
200DMA
48.93
Positive
Market Momentum
MACD
<0.01
Positive
RSI
54.42
Neutral
STOCH
40.19
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PKX, the sentiment is Positive. The current price of 55.76 is above the 20-day moving average (MA) of 54.64, above the 50-day MA of 54.01, and above the 200-day MA of 48.93, indicating a bullish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 54.42 is Neutral, neither overbought nor oversold. The STOCH value of 40.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PKX.

POSCO Risk Analysis

POSCO disclosed 29 risk factors in its most recent earnings report. POSCO reported the most risks in the "Macro & Political" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

POSCO Peers Comparison

Overall Rating
UnderperformOutperform
Sector (44)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$33.96B26.716.28%1.48%-5.78%-60.07%
74
Outperform
$15.03B20.879.93%1.60%-3.91%-30.31%
74
Outperform
$18.51B18.3511.57%1.45%-5.51%-45.07%
71
Outperform
$16.38B45.500.92%2.40%-7.63%-63.14%
69
Neutral
$28.08B10.344.72%1.42%-4.51%
44
Neutral
AU$1.54B-7.29-18.84%4.39%-0.73%-40.90%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PKX
POSCO
55.76
-9.01
-13.91%
MT
ArcelorMittal
34.00
10.98
47.70%
NUE
Nucor
147.93
0.04
0.03%
RS
Reliance Steel
294.54
12.36
4.38%
STLD
Steel Dynamics
132.68
11.85
9.81%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 05, 2025