[Feature Stock] LG Household & Health Care Jumps 7% on Multiple Target Price Upgrades by Analysts

LG Household & Health Care is showing strong performance in early trading. Investor sentiment appears to be boosted by expectations for brand growth in overseas markets such as the United States, following better-than-expected results in the first quarter.

As of 9:13 a.m. on April 29, LG Household & Health Care was trading at 342,500 won, up 7.37% (23,500 won) from the previous day.

In the first quarter, LG Household & Health Care reported consolidated sales of 1.6989 trillion won, down 2% year-on-year, and operating profit of 142.4 billion won, down 6% over the same period. However, both figures exceeded market expectations. On this day, several reports from the securities industry praised LG Household & Health Care's performance and business growth, with many raising their target prices.

Park Eunjeong, a researcher at Hana Securities, raised the target price for LG Household & Health Care from 400,000 won to 420,000 won, stating, "There were overall base effects, but all segments exceeded market expectations." She added, "This year, the company is focusing on profitability in China and expansion in non-China markets. As a result, annual sales are expected to increase by 1% year-on-year to 6.9 trillion won, and operating profit is forecast to grow by 13% to 520 billion won."

Kiwoom Securities also emphasized the growth of the LG brand in the US market and raised its target price from 400,000 won to 450,000 won. Jo Sojeong, a researcher at Kiwoom Securities, commented, "The performance of the LG brand in US channels is noteworthy. Even though the sales structure in the Amazon channel has not yet shifted to business-to-consumer (B2C) and the company has not engaged in direct sales, sales have increased by 70% year-on-year, demonstrating strong growth." She added, "If the sales structure transition is completed within the first half of the year, there is potential for further growth."

Previously, LG Household & Health Care announced through a disclosure that it would participate in a paid-in capital increase of approximately 186 billion won (130 million dollars) for its North American subsidiary. Of this, about 100 billion won (70 million dollars) will be used to support operating funds and improve the financial structure of the North American subsidiary, and about 86 billion won (60 million dollars) will be contributed in cash to The Avon Company, a subsidiary of the North American entity, to be used as operating funds and for other purposes.