Business · Companies · 1 hr ago
Nexen Tire profit forecast falls as oil and rubber costs rise
Eugene Investment & Securities lowered its Nexen Tire price target from 10,000 won to 8,500 won but kept its buy rating.
The brokerage forecasts third-quarter operating profit will fall 32.2% to 31.5 billion won from a year earlier, below market expectations.
It says a stronger won reduces earnings from exports, while higher rubber prices raise production costs.
The analysis links persistent high oil prices to a prolonged Iran war and says costs could keep rising through the fourth quarter.
Nexen has raised prices on some European products and is seeking increases in South Korea, but the brokerage says this may not offset the added costs.
The company is also reducing the share of exports supplied from China to respond to EU anti-dumping duties on Chinese tires, though shifting production could further weaken margins.
A lasting recovery depends on raw-material costs stabilising, according to the brokerage.
Eugene Investment & Securities cut its target price for Nexen Tire to 8,500 won from 10,000 won, while keeping its Buy rating.
The brokerage forecast third-quarter operating profit of 31.5 billion won, down 32.2% from a year earlier and below market expectations.
It cited rising rubber prices and a stronger won, which reduces export earnings, as key pressures on profits.
The brokerage said high oil prices could keep costs elevated through the fourth quarter.
Nexen Tire has raised prices in Europe and is seeking increases in South Korea, but the brokerage said these steps may not offset costs.
- Who
- Nexen Tire and analysts at Eugene Investment & Securities.
- What
- The brokerage cut Nexen Tire’s target price but maintained its Buy rating, citing pressure on expected profits.
- When
- The report was published on October 26, 2026. It forecast third-quarter operating profit.
- Where
- The company’s markets include Europe and South Korea; the report also cited exports from China-based production.
- Why
- Higher oil and rubber prices and a stronger won are expected to weigh on costs and export earnings.
This story does not have two clearly opposing sides.
Nexen Tire raised prices for its European RE products by 5%.
Eugene Investment & Securities cut its target price for Nexen Tire to 8,500 won from 10,000 won and forecast third-quarter operating profit would fall 32.2% year on year.
The brokerage expected cost pressures to continue through the quarter.
- Target price
- Cut from 10,000 won to 8,500 won
- Rating
- Buy maintained
- Third-quarter operating profit forecast
- 31.5 billion won, down 32.2% year on year
- European RE product price increase
- 5% in June
- China-based export share
- Being reduced from 15% to 4%
1 source
What people are saying
If high oil prices persist because the Iran war is prolonged, the recovery in profitability may be delayed, so stabilisation in raw material prices will be a precondition for an earnings turnaround.