[Click eStock] "LG Electronics, Increased Uncertainty Leads to Short-Term Stock Volatility... Target Price Down"

Target Price Lowered by 7.7% Compared to Previous Estimate

Daishin Securities on the 8th downgraded the target price for LG Electronics from 130,000 KRW to 120,000 KRW, citing increased uncertainty due to U.S. reciprocal tariffs leading to short-term stock price volatility. The investment rating was maintained as 'Buy.'

Park Kang-ho, a researcher at Daishin Securities, explained, "The imposition of reciprocal tariffs by the U.S. has raised concerns about a slowdown in demand for IT devices such as home appliances and TVs in the second quarter and the latter half of 2025. With increased uncertainty, short-term stock price volatility is expected. It is necessary to focus on valuation undervaluation from a mid- to long-term perspective."

LG Electronics recorded sales of 22.75 trillion KRW in the first quarter of this year, a 7.8% increase compared to the same period last year, and operating profit of 1.26 trillion KRW, a 5.7% decrease. Researcher Park said, "Operating profit met the consensus (average forecast by securities firms), and sales exceeded the consensus. Considering the first quarter operating profit consensus match and the recent upward trend in profits, the performance is favorable. Due to company-wide cost reductions and mix effects, the operating profit margin is estimated at 6.2% on a separate basis. Profitability expanded through increased sales of new products in home appliances (HS) and air conditioners (ES), and a high value-added mix effect," he analyzed.

The HS operating profit margin is estimated at 10%, ES at 13%, and the automotive components business (VS) is estimated to have exceeded Daishin Securities' previous estimates at 4.1%. Researcher Park said, "The expansion of competitiveness in new growth areas such as subscription home appliances and B2B (business-to-business) is continuously improving profitability (operating profit margin)."