"LG Electronics Exceeds Q3 Expectations... Next Year's Outlook Also Positive" [Click e-Stock]

On October 14, KB Securities raised its target price for LG Electronics to 100,000 won and maintained its "Buy" investment rating. This adjustment was made because, despite reflecting workforce optimization costs in the MS (TV) division, the third-quarter results of the Home Appliance (HS), Vehicle Components (VS), and Eco Solution (ES) divisions, as well as LG Innotek, are estimated to have exceeded market expectations, leading to an upward revision of performance forecasts.

LG Electronics' consolidated results for the third quarter posted revenue of 21.9 trillion won (down 1.4% year-on-year) and operating profit of 688.9 billion won (down 8.4%). Operating profit exceeded the market consensus of 600 billion won by 14.7%. Kim Dongwon, an analyst at KB Securities, stated, "In the case of the Home Appliance division, despite tariff uncertainties, the increased production share at the Tennessee plant in the United States and cost savings through logistics optimization resulted in better-than-expected performance. For the Vehicle Components division, the expansion of high-value infotainment shipments offset the slowdown in demand for electric vehicle parts, and the trend of improving profitability appears to be continuing." He added, "The workforce optimization process that began in the third quarter of this year is expected to be completed within the year, so the cost structure should improve from next year."

KB Securities forecasts LG Electronics' consolidated results for this year at 89 trillion won in revenue (up 1.5% year-on-year) and 2.6 trillion won in operating profit (down 23%). For next year, the company estimates revenue of 93 trillion won (up 4.4% year-on-year) and operating profit of 3.3 trillion won (up 27%), driven by a recovery in home appliance performance, a reduction in TV losses, and an improved cost structure. Analyst Kim Dongwon commented, "Currently, LG Electronics' share price is trading at 0.7 times its 12-month forward price-to-book ratio, marking the historical valuation floor. This suggests that concerns about tariff uncertainties and weak TV profitability are already partially reflected in the price." He further analyzed, "Going forward, the trajectory of LG Electronics' performance and share price will depend on the easing of tariff concerns and the visibility of next year's results." Meanwhile, on October 14, LG Electronics is expected to receive a cash inflow of 1.8 trillion won from the listing of its Indian subsidiary. The company plans to use the proceeds from the public offering to expand new businesses and enhance shareholder value.

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