Value
9.9/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 10.0 |
| P/S | 10.0 |
| EV/EBITDA | 9.0 |
| Fwd P/E | 10.0 |
| PEG | 10.0 |
- ▸Forward P/E: 3.2x
- ▸PEG: 0.45
- ▸Attractively valued
KEP · Why this verdict
Why Korea Electric Power Corporatio (KEP) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.2/10
ConfidenceHIGH
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
A forward price-to-earnings ratio of 3.5x and a recent earnings beat of 16.2% reflect genuine underlying value, but the stock has nearly reached its analyst target — leaving only 0.2% of headroom — and high leverage at a debt-to-equity ratio of 2.6 reduces financial cushion if the earnings recovery stalls.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
At a forward price-to-earnings of 3.5x and a PEG ratio of 0.50, the stock screens as materially undervalued in absolute terms, yet it sits just 0.2% below the analyst price target — leaving almost no near-term upside headroom within the current consensus range. Valuation breakdown | If the valuation discount widens into a new entry opportunity, analyst consensus should raise the price target at least 15% above current levels, restoring meaningful upside potential. | →Stable |
| CounterPeer-relative analysis shows an attractive price-to-earnings versus the group and superior return on equity versus peers — if sector multiples re-rate upward or if the company delivers further earnings beats, the consensus target may be revised materially higher. | ||
The company has delivered earnings beats in 3 of the 4 most recent reported quarters, with the most recent quarter exceeding expectations by 16.2%, suggesting a pattern of consistent over-delivery relative to analyst estimates. Catalyst breakdown | If the earnings delivery pattern breaks down, earnings misses should outnumber beats in any rolling 3-quarter window — specifically, 2 or more misses in 3 consecutive quarters. | →Stable |
| CounterEarnings estimates are described as trending downward, which means the 16.2% most recent beat may partly reflect lowered expectations rather than fundamental acceleration — a deteriorating estimate baseline makes the beat streak harder to maintain. | ||
With a debt-to-equity ratio cited at 2.6, the company carries elevated leverage that limits financial flexibility and amplifies downside risk if operating cash flow softens — a concern compounded by the earnings estimates trending downward. Bear case | If the leverage concern is resolved, the debt-to-equity ratio should improve to below 2.0 over the next 2 consecutive reported periods. | →Stable |
| CounterRegulated utilities commonly operate with higher leverage than general industrial peers, and a forward price-to-earnings of 3.5x already reflects a market discount for this capital structure — the leverage may be priced in rather than an incremental risk. | ||
The technical setup shows signs of improvement — MACD recovering and RSI near 49 — but the death cross remains unresolved and the stock sits below its 200-day moving average with a flat slope, meaning the recovery in price momentum has not yet been confirmed. Gates warning | If the technical recovery is confirmed, the stock should close above its 200-day moving average for 5 consecutive sessions while RSI sustains above 55. | →Stable |
| CounterRising on-balance volume indicates accumulation is underway; if momentum continues building, the stock could reclaim the 200-day moving average relatively quickly given the limited distance to the long-term trend line. | ||
At a forward price-to-earnings of 3.5x and a PEG ratio of 0.50, the stock screens as materially undervalued in absolute terms, yet it sits just 0.2% below the analyst price target — leaving almost no near-term upside headroom within the current consensus range.
→StableValuation breakdown
- Expectation
- If the valuation discount widens into a new entry opportunity, analyst consensus should raise the price target at least 15% above current levels, restoring meaningful upside potential.
CounterPeer-relative analysis shows an attractive price-to-earnings versus the group and superior return on equity versus peers — if sector multiples re-rate upward or if the company delivers further earnings beats, the consensus target may be revised materially higher.
The company has delivered earnings beats in 3 of the 4 most recent reported quarters, with the most recent quarter exceeding expectations by 16.2%, suggesting a pattern of consistent over-delivery relative to analyst estimates.
→StableCatalyst breakdown
- Expectation
- If the earnings delivery pattern breaks down, earnings misses should outnumber beats in any rolling 3-quarter window — specifically, 2 or more misses in 3 consecutive quarters.
CounterEarnings estimates are described as trending downward, which means the 16.2% most recent beat may partly reflect lowered expectations rather than fundamental acceleration — a deteriorating estimate baseline makes the beat streak harder to maintain.
With a debt-to-equity ratio cited at 2.6, the company carries elevated leverage that limits financial flexibility and amplifies downside risk if operating cash flow softens — a concern compounded by the earnings estimates trending downward.
→StableBear case
- Expectation
- If the leverage concern is resolved, the debt-to-equity ratio should improve to below 2.0 over the next 2 consecutive reported periods.
CounterRegulated utilities commonly operate with higher leverage than general industrial peers, and a forward price-to-earnings of 3.5x already reflects a market discount for this capital structure — the leverage may be priced in rather than an incremental risk.
The technical setup shows signs of improvement — MACD recovering and RSI near 49 — but the death cross remains unresolved and the stock sits below its 200-day moving average with a flat slope, meaning the recovery in price momentum has not yet been confirmed.
→StableGates warning
- Expectation
- If the technical recovery is confirmed, the stock should close above its 200-day moving average for 5 consecutive sessions while RSI sustains above 55.
CounterRising on-balance volume indicates accumulation is underway; if momentum continues building, the stock could reclaim the 200-day moving average relatively quickly given the limited distance to the long-term trend line.
Per-dimension breakdown
Quality
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 6.2 |
| ROA | 2.2 |
| Gross margin | 0.0 |
| Op margin | 6.2 |
| Net margin | 4.5 |
| Current ratio | 1.7 |
| FCF quality | 4.7 |
| Moat | 4.2 |
| Piotroski F | 6.7 |
- ▸Earnings quality warning: 60% FCF/NI
- ▸No competitive moat
Growth
3.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.7 |
| EPS growth | 3.4 |
Momentum
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 6.8 |
| OBV | 1.0 |
| MA position | 1.5 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope flat
Sentiment
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 8.4 |
| erm sentiment | 3.2 |
- ▸Analyst upside: 28%
Insider
5.0/10data confidence 50%Peer rank
5.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.8 |
| quality rank | 5.3 |
| growth rank | 1.0 |
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.9 |
| support resistance | 6.6 |
| 52w position | 0.7 |
| gap | 4.0 |
Risk (lower is worse)
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.9 |
| days to cover | 9.9 |
| volatility | 2.1 |
| put call | 1.9 |
| implied vol | 2.1 |
| beta | 8.3 |
| debt equity | 2.4 |
- ▸Elevated put/call: 1.71
- ▸High IV: 68%
Catalyst
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 2.5 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 7.0 |
- ▸Strong earnings: 3B/1M
- ▸Dividend: 430.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:47d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:2.8<4.5
- ASYMMETRY:1.1<1.5@spot
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
1.05
Upside
+8.7%
Downside
8.3%
Sizing output
AVOID
SetupRECOVERY — Death cross but MACD improving, RSI 46
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 3.7 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 9.9) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:2.8<4.5, ASYMMETRY:1.1<1.5@spot, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 1.05 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 9.9, Catalyst at 6.2, and Sentiment at 5.6; the weakest are Momentum at 2.8, Growth at 3.0, and Quality at 4.0. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 1.05 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1At a forward price-to-earnings of 3.5x and a PEG ratio of 0.50, the stock screens as materially undervalued in absolute terms, yet it sits just 0.2% below the analyst price target — leaving almost no near-term upside headroom within the current consensus range.
Trip ifAnalyst consensus price target rises more than 15% above the current price, restoring meaningful implied upside.
- P2The company has delivered earnings beats in 3 of the 4 most recent reported quarters, with the most recent quarter exceeding expectations by 16.2%, suggesting a pattern of consistent over-delivery relative to analyst estimates.
Trip ifEPS falls below analyst consensus in 2 or more of any 3 consecutive quarters.
- P3With a debt-to-equity ratio cited at 2.6, the company carries elevated leverage that limits financial flexibility and amplifies downside risk if operating cash flow softens — a concern compounded by the earnings estimates trending downward.
Trip ifDebt-to-equity ratio falls below 2.0 for 2 consecutive reported periods.
- P4The technical setup shows signs of improvement — MACD recovering and RSI near 49 — but the death cross remains unresolved and the stock sits below its 200-day moving average with a flat slope, meaning the recovery in price momentum has not yet been confirmed.
Trip ifPrice closes above the 200-day moving average for 5 consecutive sessions while RSI exceeds 55.