[Click eStock] "LGD, Profit Improvement Trend Accelerates... Target Price Up"

Target Price Raised from 13,000 Won to 15,000 Won

NH Investment & Securities on the 21st raised the target price for LG Display from 13,000 KRW to 15,000 KRW, anticipating a full-scale profit improvement due to increased orders from North American clients. The investment rating was maintained at 'Buy.'

Researcher Lee Gyu-ha of NH Investment & Securities explained, "We expect the delivery of new smartphone displays to North American clients to begin smoothly from the end of Q2 to early Q3, supplying volumes close to maximum production capacity, which led us to raise earnings forecasts and the target price. Considering the medium- to long-term profit improvement trend, we maintain the investment rating."

Smartphone shipments to North American clients are expected to start soon. Lee said, "Unlike in the past, it is positive that deliveries will occur around the same time as competitors without delays. We estimate LG Display's 2024 North American smartphone panel shipments to increase by 20% from the previous 57 million units to 68.5 million units, and reflecting this, we revise the operating profit for the second half of 2024 from 79 billion KRW to 399 billion KRW."

Second-half earnings are expected to significantly exceed market expectations. Lee forecasted, "Although an operating loss of 378.6 billion KRW is expected in Q2 this year, aligning with consensus (average securities firm forecasts), the second half will greatly surpass market consensus due to increased volumes from North American clients. From 2025, depreciation for the E6 Line 2 and Guangzhou large OLED Line 1 will end, continuing the profit improvement trend." He added, "In the medium to long term, benefits are expected from the expansion of IT OLEDs and the launch of foldable products by North American clients, so we recommend buying at low prices considering industry conditions and earnings improvements."