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Photo = Yonhap news |
[Alpha Biz= Paul Lee] On June 5, iM Securities reaffirmed its target price for LG Electronics at KRW 100,000 and maintained its “Buy” rating. This reflects a 41.2% upside potential from the current share price. The target price, which was lowered on April 25, remains unchanged.
LG Electronics' stock has declined since reaching its 52-week high of KRW 115,400 on July 17, 2023. It dropped to as low as KRW 64,100 on April 9, 2024, before rebounding modestly to the KRW 70,000 range.
Ko Eui-young, an analyst at iM Securities, attributed the stock’s decline to a combination of factors. “Concerns over tariffs have heightened demand uncertainty. The TV segment is facing intensified competition, and controlling costs for LCD panels has become increasingly difficult,” Ko noted. “Meanwhile, LG Magna’s earnings outlook has deteriorated due to weakening EV demand, and equity-method affiliate LG Display’s volatile profits continue to weigh down valuation.”
Despite these concerns, Ko sees potential upside if key business units under pressure recover. “Although there is a lack of short-term catalysts, a rebound in underperforming divisions or strong performance from the newly established ES (Electronics Solutions) division could highlight LG Electronics’ undervalued status,” he said. “Furthermore, government policies could spotlight the company’s capabilities in cooling solutions, ASIC design, and quantum computing.”
Ko projected LG Electronics’ full-year revenue to reach KRW 90.728 trillion in 2024, up KRW 3 trillion from the previous year. Net profit is forecasted to surge to KRW 1.425 trillion, nearly four times higher than in 2023.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
