[Click e-Stock] "LG Electronics Target Price Raised on Cost Improvements and Advanced Home Robot Technology"

Kiwoom Securities announced on February 2 that it has raised its target price for LG Electronics to 130,000 won while maintaining its "Buy" investment rating.

Sowon Kim, a researcher at Kiwoom Securities, stated, "Profit growth is expected due to structural cost improvements such as workforce optimization, increased proportion of U.S. local production, and logistics cost stabilization." She further analyzed, "A 300 billion won voluntary retirement expense for workforce optimization was reflected in the fourth quarter of last year, and this year, about 60% of U.S. sales volume will be met through North American local production to minimize tariff impacts."

She continued, "Expansion of the AI data center cooling solution business is anticipated based on collaborations with big tech companies, and commercialization efforts are also expected alongside the advancement of home robot technology. Leveraging global home appliance data and technological competitiveness, LG Electronics is likely to secure a competitive edge in the household humanoid market and may demonstrate new growth momentum through the combination of household humanoids and subscription businesses in the future."

Kim added, "For the first quarter of this year, operating profit is expected to reach 1.3791 trillion won, surpassing the market consensus of 1.2777 trillion won. The MS (TV) division is projected to return to profitability due to cost reduction effects despite sluggish demand for LCD TVs, while the VS (vehicle components) division is expected to maintain stable profitability through mix improvement centered on infotainment (IVI) and increased operating rates at LG Magna."

She also noted, "Although the ES (air conditioning, etc.) division is likely to see a decline in sales due to weakened consumer sentiment and a sluggish construction market, growth is expected through mix improvement centered on new products and the expansion of subscription and online sales. However, the HS (home appliances) division is projected to see an increase in sales driven by premium and mass-market strategies and online subscription business, but operating profit is expected to decline year-on-year due to tariff burdens and the increased proportion of North American production."