[Special Stock] LG Electronics Falls on Q2 Earnings Decline Outlook

[Asia Economy Reporter Hwang Yoon-joo] LG Electronics is showing weakness amid forecasts of a decline in second-quarter earnings.

As of 10:15 AM on the 29th, LG Electronics is trading at 116,000 KRW, down 3.32% (4,000 KRW) from the previous day.

On this day, securities firms lowered LG Electronics' target stock price in their reports, citing intensified competition in the second quarter leading to a decline in profitability.

NH Investment & Securities cut LG Electronics' target price by 19% to 162,000 KRW. IBK Investment & Securities lowered it by 11.7% to 150,000 KRW. Daishin Securities adjusted it down by 8.3% to 165,000 KRW, and Hi Investment & Securities reduced it by 8.1% to 170,000 KRW.

Joo Min-woo, a researcher at NH Investment & Securities, said, "LG Electronics' second-quarter sales are expected to increase by 11% year-on-year to 19 trillion KRW, but operating profit is forecasted to decline by 4% to 841.9 billion KRW, falling short of expectations," adding that "the company is entering a growth stagnation phase after benefiting from the COVID-19 global pandemic boom."

Ko Eui-young, a researcher at Hi Investment & Securities, evaluated, "The stock price has been adjusted due to inflation and the possibility of a slowdown in the home appliance market caused by weakened U.S. housing sentiment. Based on this year's earnings, the price-to-book ratio (PBR) is only 1.1 times, with a downside floor expected at 1.0 times, establishing a degree of price downside rigidity."

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