[Click e-Stock] "LG Innotek Expected to Deliver Q3 Earnings Surprise... Target Price Raised"

On September 23, DS Investment & Securities raised its target price for LG Innotek to 240,000 won, stating that the company is expected to deliver third-quarter results that will exceed market expectations.

Jo Daehyung, a researcher at DS Investment & Securities, commented, "Although consolidated sales for the third quarter are projected to reach 5 trillion won, down 12.6% year-on-year, operating profit is expected to rise by 36.8% to 178.5 billion won, surpassing the consensus estimate of 164.2 billion won." He explained, "Profitability is likely to be better than anticipated due to stronger-than-feared demand for new models from key strategic customers and favorable won-dollar exchange rates at the time of sales compared to purchases."

The sales trend for new models is also positive. Jo noted, "There have been continued news flows indicating that initial sales, including pre-orders for the new model launched in September, are robust, alleviating concerns about demand." He added, "Stronger-than-expected demand has been observed in the recently sluggish Chinese and Indian markets." As a result, suppliers are reportedly being instructed to expand production, focusing on general models.

The optical solutions division is also expected to see a rebound in performance next year. Jo stated, "Performance in 2026 is projected to rebound, driven by upgrades in camera module specifications such as the adoption of variable apertures and the full-scale operation of the new plant in Vietnam." He added, "With the strategic customer's ongoing increase in production share in India, a rebound in market share within the customer base is also anticipated."

Jo emphasized, "Based on expectations for a performance rebound next year, we are raising our target price to 240,000 won." He continued, "With a demand recovery confirmed in the new model released five years after the previous hit, we can expect a favorable order flow following the initial build-up volume." He added, "The growing presence in humanoid applications and the narrowing losses in the FC-BGA business are also positive factors. There is ample momentum for a rebound, as the stock price remains at the lower end of its historical band."

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