Citi has cut its price target for Hyundai Motor from 559,000 KRW to 455,000 KRW, while also trimming the price-to-earnings multiple used in its valuation from approximately 12 times to around 10 times. The brokerage noted that expectations of a stronger South Korean won and higher cost assumptions have led it to reduce net profit forecasts for Hyundai Motor for the fiscal years 2026 through 2028 by 6% to 10%.

Hyundai Motor anticipates that new model launches will drive sales improvement starting in the fourth quarter of 2026. Notably, the Tucson and Avante are set to undergo full generational redesigns. The Tucson currently sells approximately 600,000 to 700,000 units globally per year, while the Avante records global annual sales of around 400,000 units.

The company also plans to introduce its first extended-range electric vehicles in the United States during the first half of 2027, including the Santa Fe EREV and GV70 EREV. In the European market, Hyundai Motor expects that the European Union's proposed Industrial Acceleration Act could help ease competitive pressures. Under the relevant proposal, battery electric vehicles and plug-in hybrid vehicles sold in the EU may be required to be produced or assembled locally in the future, with the localization rate for auto parts and key battery materials exceeding 70%. Currently, discussions are underway regarding implementation by the end of 2027 or early 2028.

Meanwhile, Hyundai Motor experienced a production shortfall of approximately 60,000 to 70,000 units in the third quarter of 2026 due to union strikes. However, the company believes the impact of this labor negotiation on rising personnel costs will be relatively limited, as the main point of contention centered on extending the retirement age rather than significantly increasing wages.

Citi has also shifted its valuation base year for Hyundai Motor from 2026 to 2027, applying a lower price-to-earnings multiple to the core business value based on projected core earnings for 2027. The brokerage believes that Hyundai Motor's operating environment is likely to remain under pressure, prompting the corresponding downward adjustment to its valuation level.