[Click eStock] "LG Electronics Lowers 2025 Outlook... Target Price ↓"

Shinhan Investment Corp. on the 9th revised down its 2025 operating performance forecast for LG Electronics by 5% and lowered the target price to 130,000 KRW. The investment rating was maintained as 'Buy.'

Researchers Oh Kang-ho and Seo Ji-beom stated, "The preliminary results for Q4 2024 were announced, showing disappointing performance following Q3," adding, "Operating profit fell short of consensus by 63%, and it is estimated that major business units underperformed consensus in both sales and operating profit."

However, they added, "The first quarter is the most profitable period on an annual basis, and there is an expectation of performance improvement," and "With the expansion of new growth drivers such as subscriptions and B2B sales, the growth momentum remains valid."

The two researchers explained, "The target price is lowered by 8% from the previous level, changing the price-to-book ratio (BPS) from 2024 to 2025," and "The valuation was lowered from 1.2 times to 1.0 times."

They continued, "Future valuation upside factors are judged to be subscription services, expansion of automotive parts orders, and strengthening of B2B business," and "Although the 2025 operating performance is revised down by 5% compared to the previous forecast, valuation reappraisal is possible if new business performance is added."

Meanwhile, LG Electronics previously announced its preliminary Q4 results. Sales amounted to 22.8 trillion KRW, down 1% year-on-year, and operating profit was 146.1 billion KRW, down 53% from the previous year. This exceeded consensus by 1.2% in sales but fell short by 63% in operating profit. The operating profit margin was 0.6%.

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