[Click eStock] "LG EnSol, Electric Vehicle Demand Continues to Slow... Target Price Down"

On the 29th, IBK Investment & Securities forecasted that LG Energy Solution's average selling price (ASP) will continue to decline in the first quarter of this year, along with a slowdown in electric vehicle demand. Accordingly, the firm maintained its 'Buy' rating but lowered the target price to 500,000 KRW.

Researcher Hyunwook Lee of IBK Investment & Securities stated, "We expect first-quarter sales to fall 19.2% quarter-on-quarter to 6.464 trillion KRW, and operating profit to plunge 88.4% to 39 billion KRW."

Lee analyzed, "Due to continued weak demand for electric vehicles in Europe, reduced operating rates at the Poland plant, and inventory accumulation by major North American clients, shipments of mid-to-large electric vehicles (EVs) are expected to sharply decline compared to the fourth quarter of last year. Additionally, with the expansion of the lagging effect caused by falling prices of key metals, the ASP for small and mid-to-large EVs is projected to drop by 14% and 5%, respectively, in the first quarter."

He added, "Reflecting the global slowdown in EV demand and downward revisions to profit estimates, we are lowering the target price to 500,000 KRW."

Meanwhile, energy storage systems (ESS) are expected to see declines in both shipment volume and profitability compared to the fourth quarter due to seasonal off-peak periods.