A047050: Long-Term LNG Offtake And Pipeline Supply Will Drive Future Upside

Analysts have modestly revised their price target for Posco International to reflect slightly lower discount rate and earnings multiple assumptions, indicating only a marginal adjustment in their fair value outlook.

What's in the News

• POSCO International finalized a strategic partnership with Glenfarne Alaska LNG to support development of the Alaska LNG Project, the only federally authorized LNG export project on the U.S. Pacific Coast (Key Developments).
• Under the partnership, POSCO will supply a significant portion of the steel needed for Alaska LNG’s 807 mile, 42 inch pressurized natural gas pipeline, leveraging its position as a leading global steel producer (Key Developments).
• The parties agreed a 20 year Heads of Agreement for 1 million tonnes per annum of LNG offtake on a Free on Board basis. This marks the first HOA signed for the Alaska LNG Project (Key Developments).
• POSCO International will make a pre FID capital investment in the Alaska LNG Project. The project is being developed in two financially independent phases to serve both Alaska’s domestic gas demand and 20 MTPA of LNG exports (Key Developments).

Valuation Changes

• Fair Value Estimate is unchanged at approximately ₩68,375 per share, indicating no revision to the core intrinsic value assessment.
• The discount rate edged down slightly from about 9.54 percent to 9.45 percent, reflecting a modestly lower perceived risk or cost of capital.
• Revenue growth is effectively unchanged at around 3.92 percent, suggesting stable expectations for top line expansion.
• The net profit margin remained virtually flat at roughly 2.29 percent, implying no meaningful shift in profitability assumptions.
• The future P/E multiple eased marginally from about 18.28 times to 18.23 times, signaling a slightly more conservative valuation multiple applied to forward earnings.