SK Securities said on the 17th that LS Electric can maintain a high multiple due to the structural growth of U.S. power demand. The firm raised its target price 33.5% to 220,000 won from 164,800 won and maintained a buy rating. LS Electric's previous trading day closing price was 188,600 won.
SK Securities projected that LS Electric will post 1.3494 trillion won in revenue and 133.2 billion won in operating profit for the first quarter of this year. That would be up 30.7% and 52.6%, respectively, from a year earlier.
Key growth drivers cited include a base effect from the normalization of civilian projects that were delayed due to domestic political instability in the first quarter and the full recognition of revenue from data centers for North American big tech.
Na Min-sik, an analyst at SK Securities, noted, "A monitoring point is whether the automation division, which posted a loss in the fourth quarter of last year, will turn to profit in the first quarter of this year."
SK Securities judged that LS Electric's high multiple, with a target price-to-earnings ratio (PER) reaching 50 times, is sustainable. The market's confidence in the power infrastructure cycle is emerging, as multiple expansion is appearing not only among power equipment makers but also up to engineering, procurement and construction (EPC).
Na said, "With explosive growth in the data center market, the structural growth of U.S. power demand will continue into 2027."