Kyobo Securities on the 23rd projected that LG Electronics will post second-quarter results that far exceed market expectations this year. It said operating profit is expected to top 1.5 trillion won as the effects of a tariff refund, improved results at subsidiary LG Innotek, and continued profitability in the vehicle component solutions (VS) business coincide. It raised its target price to 350,000 won from 180,000 won and maintained a "buy" rating.
Choi Bo-young, an analyst at Kyobo Securities, forecast LG Electronics' second-quarter results on a consolidation basis at 22.8 trillion won in revenue and 1.5011 trillion won in operating profit. That would be up 10.0% and 135.1%, respectively, from a year earlier. Operating profit would beat the market consensus of 997.6 billion won by about 50%.
Kyobo Securities cited the tariff refund, improved results at LG Innotek, and strengthened competitiveness in the core business as the drivers behind the earnings surprise.
Choi said, "A significant portion of the applied import tariff amount is expected to be refunded, and we conservatively estimate the related amount at about 300 billion won," adding, "LG Innotek is also expected to reflect 202.2 billion won in operating profit on a consolidation basis, supported by a favorable exchange rate and strength in the optical and substrate divisions."
Choi added, "The HS division's efficient management of logistics costs and materials and supplies, and the VS division's six straight quarters of profit are adding to structural improvements."
Kyobo Securities also focused on growth momentum in the second half. It identified the AI data center cooling solutions business and the potential to expand collaboration with Nvidia as key investment points.
Choi said, "Quality certification tests for chillers for AI data centers destined for two North American big tech companies are in the final stages, and orders appear imminent," adding, "Revenue recognition is expected to be possible within a year after the qual test is completed."
It also projected expanded collaboration with Nvidia.
Choi said, "Within two weeks of the June 8 meeting with Jensen Huang, working-level follow-up steps have been underway," adding, "Specific business cooperation talks will continue on how to connect LG Group's key business capabilities with the Nvidia AI platform, and we expect additional contracts or a roadmap related to home appliances and robotics to be decided in the second half."
Kyobo Securities said LG Electronics' corporate value needs to be assessed by different standards than in the past.
Choi said, "In the past, LG Electronics was perceived as an appliance-centered company, but it now needs to be re-evaluated as a growth stock expanding into data center cooling solutions for big tech and robotics, not just a simple appliance maker."
Choi added, "The stock recently hit its historical peak of 467,500 won and has since moved sideways, but even though the 2026 forward valuation is higher than the past average, it is still not burdensome compared with the peak ranges of 2023–2024."