[Click eStock] "LG Electronics Lowers Q4 Earnings Forecast... Target Price Down"

Hana Securities lowered the target price for LG Electronics to 150,000 won on the 4th, stating that "the previous forecast for the fourth quarter of last year on a consolidated basis has been revised downward." The investment opinion of "buy" was maintained. The closing price as of the previous day was 99,500 won.

Seoul Yeouido LG Twin Tower view. / Photo by Jinhyung Kang aymsdream@

On the same day, Hana Securities researchers Kim Rok-ho and Kim Min-kyung said, "The consolidated sales for the fourth quarter of last year are expected to increase by 5% year-on-year to 22.8486 trillion won, and operating profit is expected to increase by 503% to 418.3 billion won," adding, "This is a performance that has been revised downward from the previous forecast, and on a separate basis, a deficit is expected."

Researcher Kim analyzed, "Both the Home Appliance (H&A) and Home Entertainment (HE) sectors experienced weaker demand than expected, and it is estimated that related marketing costs were partially incurred. Additional one-time costs related to the year-end were also added, resulting in a deficit similar to the same period last year," adding, "Despite weak demand in the Vehicle Components (VS) sector, sales increased compared to the previous quarter, and it is the only sector expected to achieve a profit."

The performance outlook for this year is not smooth. Researcher Kim said, "While demand for home appliances and TVs may stop declining, it is not easy to expect a strong recovery," adding, "Although the VS sector's scale growth will continue, recent slowdowns in demand for automotive electronics and electric vehicles make it difficult to expect a high growth rate." However, performance is expected to be maintained at last year's level. This is because the competitiveness and position of the home appliance sector remain solid, and logistics and transportation cost burdens are still low. The VS sector has shown a steady operating profit margin of 3-5% since quarterly sales exceeded the break-even point, making it the business division with the highest potential for performance improvement compared to last year.

Researcher Kim said, "The separate operating profit forecast for this year has been lowered by 10%, leading to a lower target price," adding, "Although investment points are not clear, it is certain that various negative factors have been pre-reflected in the stock price." He added, "The deficit in the fourth quarter of last year, participation in LG Display's paid-in capital increase, and the slowdown in demand in the U.S. electric vehicle market have been reflected, causing the price-to-book ratio (PBR) to fall to 0.78 times. Since the first half of this year is expected to show solid performance due to the seasonality of home appliances, an investment strategy focusing more on an increase rather than a decline at the current stock price level is reasonable."

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