[Click eStock] "LG Energy Solution, Current Stock Price Reflects Fair Value... 'Investment Opinion Neutral'"

Hana Securities evaluated on the 29th that the current stock price of LG Energy Solution reflects its fair value. The investment rating was downgraded from 'Buy' to 'Neutral,' while the target price of 395,000 KRW was maintained.

LG Energy Solution reported third-quarter results with sales of 6.9 trillion KRW, a 16% decrease compared to the same period last year, and operating profit of 448.3 billion KRW, down 39% year-on-year.

Hyunsoo Kim, a researcher at Hana Securities, stated, "The automotive battery segment continued to face sluggish electric vehicle sales in Europe. Profitability is estimated to have improved quarter-on-quarter due to the lag effect from short-term metal price increases early in the quarter, expanded efforts to reduce raw material costs, and compensation payments to some customers with weaker-than-planned order volumes." He added, "The small battery segment saw a decline in sales due to customer inventory adjustments and intensified competition. Although shipments to Tesla were weak, sales of pouch batteries for mobile devices increased quarter-on-quarter, raising the proportion of high-margin product sales, so the segment's operating profit margin likely remained similar to the previous quarter."

Researcher Kim assessed that the current stock price level reflects fair value. He explained, "The stock price has reached the target price of 395,000 KRW following a recent three-month rise, but due to the absence of further upward revisions in earnings estimates and multiple expansion logic, the target price is maintained and the investment rating is downgraded to Neutral. The current stock price sufficiently reflects steep growth potential." He added, "We maintain a trading approach within a market capitalization range of the high 60 trillion KRW to 80 trillion KRW."