NH Investment & Securities said on the 14th that it needs to further lower the earnings bar for LG Energy Solution. It maintained a "Buy" rating and a target price of 4.3 million won. The previous trading day's closing price of LG Energy Solution was 3.6 million won.
Researcher Joo Min-woo at NH Investment & Securities said, "As the 2026 operating profit bar is revised downward, the share price is failing to find direction unlike the KOSPI index," adding, "Because further cuts to next year's operating profit are needed in light of the U.S. subsidies repeal, a rebound in the share price will be possible after the profit downgrades are finished."
The researcher judged that next year's profit depends on how much U.S. electric vehicle sales slow. As of the 1st of this month, purchase subsidies have been repealed. Some original equipment manufacturers (OEMs) are offering price discounts and their own incentives, so the worst-case scenario may be avoided, but a sales slowdown appears unavoidable.
The researcher presented next year's operating profit at 2.8 trillion won. The previous outlook was 3.2 trillion won. It assumed that sales to GM would slow from 29 GWh this year to 25 GWh next year. With GM's electric vehicle sales estimated at about 200,000 units this year (140,000 units accumulated through September), the analysis is that a slowdown next year is inevitable given weak demand and inventory adjustments.
That day, LG Energy Solution said it posted consolidated sales of 5.7 trillion won and operating profit of 601.3 billion won in the third quarter of this year. Those figures are up 3% and 17%, respectively, from market expectations. The researcher said, "Operating profit excluding subsidies from the advanced manufacturing production tax credit (AMPC) under the U.S. Inflation Reduction Act (IRA) was 235.8 billion won," and explained, "It beat the consensus thanks to a one-off compensation payment (estimated in the 200 billion won range) and a higher-than-expected exchange rate."