[Click eStock] "LG EnSol Price Decline to Slow Down... Target Price ↓"

On the 10th, LG Energy Solution headquarters on Yeouidaero, Yeongdeungpo-gu, Seoul. Photo by Jinhyung Kang aymsdream@

NH Investment & Securities analyzed on the 12th that the decline in battery selling prices for LG Energy Solution will slow down starting from the fourth quarter. Reflecting the stock price drop of competitor CATL, the investment opinion remains 'Buy,' but the target price has been lowered to 660,000 KRW.

Researcher Joo Min-woo of NH Investment & Securities stated, "As lithium prices approach the breakeven point (18?20 USD per kg), the bottom of lithium prices is expected to be confirmed within the year, leading to a slowdown in the decline of battery prices, including cathode materials, from the fourth quarter."

Although sales slowdowns centered on Volkswagen and Renault negatively impact performance, recovery in sales led by U.S. OEMs (Tesla, GM) is expected in the fourth quarter.

Researcher Joo assessed, "Sales are also expected to recover from the third quarter low starting in the fourth quarter (due to reduced price decline and improved production/sales of U.S. OEMs), and the stock price is anticipated to pass the bottom accordingly."

Meanwhile, third-quarter results exceeded expectations. Sales rose 7% year-on-year to 8.2 trillion KRW, and operating profit increased 40% to 731.2 billion KRW, recording -1% and +8% against consensus, respectively.

Researcher Joo analyzed, "The advanced manufacturing production tax credit (AMPC) increased by 94% quarter-on-quarter to 216 billion KRW, surpassing the forecast of 170 billion KRW, which underpinned the strong performance." He explained, "GM's production recovery (50,000 units in the first half, 100,000 units in the second half) and the start of new car deliveries in September positively influenced the AMPC."

By segment, the automotive division (down 5% quarter-on-quarter) performed better than expected due to GM's influence, while the small-sized segment (down 5% quarter-on-quarter) underperformed, likely due to Tesla's production disruptions.

Researcher Joo projected, "With production and sales recovery centered on GM and Tesla, operating profit in the fourth quarter is expected to reach 895.9 billion KRW," forecasting it will exceed the consensus of 840 billion KRW. He added, "A technical correction is currently underway, and a rebound in secondary batteries is expected by the end of the year."

This content was produced with the assistance of AI translation services.