LG Electronics reported record quarterly sales for the first quarter (January-March), but due to tariffs, securities firms are consecutively lowering their target stock prices.
LG Electronics announced on the 7th that it recorded a preliminary sales figure of 22.7447 trillion won for the first quarter. This figure represents a 7.8% increase compared to the previous year, and it is the first time that sales surpassed 22 trillion won in the first quarter. The operating profit recorded 1.259 trillion won, a decrease of 5.7% compared to the same period last year, but the securities industry assesses this as a favorable performance, reflecting a recent upward trend in profits.
Nevertheless, securities firms are consecutively lowering their expectations for LG Electronics. This is due to increased market uncertainty caused by President Trump's tariff measures. Since LG Electronics produces products in South Korea, Vietnam, Thailand, and India, there is a judgment that it will be difficult to avoid performance volatility due to the imposition of high tariffs.
DAISHIN SECURITIES maintained its investment opinion of 'buy' for LG Electronics on the 8th and lowered its target stock price from 130,000 won to 120,000 won, a 7% decrease. Similarly, Shinhan Investment Corp. (120,000 won to 100,000 won), Kiwoom Securities (120,000 won to 110,000 won), DB Securities (130,000 won to 110,000 won), and KB Securities (130,000 won to 105,000 won) also reduced their target stock prices for LG Electronics.
Park Kang-ho, a researcher at DAISHIN SECURITIES, noted, "The introduction of mutual tariffs by the United States has raised concerns about a decrease in demand for home appliances and IT devices such as TVs," stating, "As uncertainty increases, we expect short-term stock price volatility. From a medium to long-term perspective, it is necessary to focus on the undervaluation in valuations."
He added, "The second quarter (April-June) will be important as U.S. tariff policies directly affect performance," and stated, "It will be crucial to respond to tariff risks through premium-centered home appliance product mix in the home appliance sector and the heating, ventilation, and air conditioning (HVAC) business, which is Business-to-Business (B2B) for commercial and industrial uses in Eco Solutions (ES)." He further remarked, "The specific use of the cash raised through the IPO (initial public offering) in India is also an important observation point."
Kim Dong-won, a researcher at KB Securities, said, "The impact of reciprocal tariffs by Trump reflects future valuation declines and increased demand uncertainty," and noted that he adjusted his operating profit estimates for this year and next year to decrease by 12% and 14% from previous estimates, respectively.
Furthermore, he stated, "LG Electronics, which has secured global production bases in the U.S., China, India, and Vietnam, will ensure operational flexibility in future production sites considering differentiated tariff rates by country," and added that it forecasts an expansion of home appliance and TV production volume through the expansion of its Tennessee plant.