As the 4th quarter performance season continues, foreign selling poured in as securities firms’ target stock prices for LG Group affiliates fell. It is interpreted that investment sentiment has frozen due to the dark performance outlook for the first quarter of this year.
According to the securities market on the 2nd, three of the top 10 stocks that foreign investors net sold on the KOSPI in the past month from the 2nd of last month to the previous day were LG Group stocks.
In particular, LG Chem (KRW 304.7 billion) ranked second in net selling by foreigners, following Samsung SDI. LG Electronics (KRW 142.6 billion) and LG (KRW 72.3 billion) ranked 5th and 9th, respectively.
Stock prices also could not avoid a downward trend. Last month, stock prices of LG Group stocks, including LG Energy Solution (-10.88%), LG Chem (-12.93%), LG Electronics (-8.15%), LG Household & Health Care (-14.51%), and LG Innotek (-20.25%), were generally weak. showed. This is less than the KOSPI decline rate (-5.96%) during the same period.
According to financial information company FnGuide, over the past month, 15 securities firms have lowered the target stock price of LG Energy Solution, which has the largest market capitalization among LG Group stocks.
Among them, NH Investment & Securities, which set the lowest target price, lowered its target stock price from 530,000 won to 460,000 won. The highest target price suggested by Shinyoung Securities is 550,000 won.
The reason securities companies have lowered their expectations one after another is because poor performance is expected in the first quarter of this year following the fourth quarter of last year due to the slowdown in global demand for electric vehicles. Kiwoom Securities estimated LG Energy Solutions’ operating profit in the first quarter of this year to be 168.2 billion won, a 73% decrease from the same period last year. The analysis is that profitability deterioration is inevitable due to the decline in average selling price (ASP) and the continued impact of fixed cost burden.
For LG Chem, 20 securities companies have lowered their target stock price in the past month. This is because the company received a poor report card last year due to the slump in the petrochemical market, and poor performance is expected to continue until the first half of this year.
Daishin Securities lowered LG Chem’s target stock price from 700,000 won to 650,000 won, and Hanwha Investment & Securities lowered it from 670,000 won to 570,000 won. Adjusted downward. Meritz Securities’ target price was the lowest at 490,000 won.
Yoon Yong-sik, a researcher at Hanwha Investment & Securities, said, “While the cash generation ability has decreased due to the delay in the recovery of the petrochemical industry and the sluggish performance of LG Energy Solutions, there is no change in the annual facility investment plan of 4 trillion won by 2026, so external financing will be inevitable.” He said.
As for LG Electronics, 11 securities companies, including Mirae Asset Securities and Samsung Securities, lowered their target stock prices one after another. This is because LG Electronics’ operating profit in the first quarter of this year is expected to decrease compared to last year.
Mirae Asset Securities predicted that LG Electronics’ first quarter operating profit would fall 15.2% from the same period last year to KRW 1.2703 trillion, falling below market expectations. The main factor is the increase in logistics costs due to the Middle East freight rate issue and the slowdown in the recovery of the HE division, which is in charge of the TV business.
However, some say the stock price is undervalued. Lee Min-hee, a researcher at BNK Investment & Securities, said, “Although LG Electronics’ sales growth is limited due to the sluggish global consumer economy, it is believed to be undervalued as it maintains good profitability through cost improvement and active sales strategies.”
2024-02-03 14:54:28
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