[Click eStock] "LS, Solid Q1 Performance... Ample Room for Stock Price Growth"

Meritz Securities expects LS's first-quarter earnings to meet market consensus. Considering the visibility of mid- to long-term earnings improvement, the investment rating is maintained as Buy, with a target price of 210,000 KRW.

LS's consolidated operating profit for the first quarter is forecasted at 242.6 billion KRW, a 1.4% decrease compared to the same period last year. During the same period, LSMnM's operating profit is expected to exceed estimates at 60.7 billion KRW, reflecting some positive effects from exchange rates and copper prices.

LS Cable & System is expected to normalize its performance with a 1.9% year-on-year increase and a 59.9% quarter-on-quarter rise in operating profit to 74.3 billion KRW in the first quarter. LS ELECTRIC's first-quarter operating profit is expected to remain around 85 billion KRW due to reduced and delayed investments from major corporate clients, but continuous earnings improvement is anticipated from the second quarter as sales to U.S. big tech companies begin to be recognized in earnest.

Researcher Jang Jae-hyuk of Meritz Securities forecasted that LS will continue to improve its earnings.

Researcher Jang explained, "In 2026, sales from LS Cable & System's Donghae Plants 4 and 5 will begin, marking the start of significant earnings improvement. LS Cable & System's order backlog continues to expand, and LS Greenlink has also received approval for approximately 140 billion KRW of the total 200 billion KRW U.S. federal government subsidy (IRA) for its U.S. factory construction."

Furthermore, he viewed that there is ample potential for stock price appreciation due to LS's commitment to enhancing shareholder value. He said, "At the recent shareholders' meeting, an annual dividend increase of more than 5% and a mid- to long-term ROE target of 8.0% were presented," adding, "The official declaration of a shareholder value enhancement commitment, which is different in nature from before, can be interpreted as a clear signal of change."