LG Electronics Set to Accelerate Growth in Robotics and AI Cooling Solutions; Target Price Raised to KRW 290,000

[Financial News] Shinhan Investment & Securities raised its target price for LG Electronics by 61% from the previous target to KRW 290,000, saying the company is set to enter a corporate-value reassessment phase as it builds up its robotics and artificial intelligence (AI) data center cooling solutions businesses on the back of stable results from its home appliance and vehicle solutions operations.
The brokerage maintained its “Buy” rating. On the 2nd, Oh Kang-ho, a research fellow at Shinhan Investment & Securities, analyzed, "The key driver determining the direction of the stock price is shifting from the earnings-focused Home Appliance Solution (HS) and Vehicle Solution (VS) divisions to the robotics and Eco Solution (ES) divisions, which are driving the valuation narrative. This will be the time when growth potential comes into focus through order expectations and events such as the Consumer Electronics Show (CES), from the fourth quarter through the first quarter of next year."
LG Electronics' third-quarter revenue is projected to increase 10% year on year to KRW 24.1 trillion, while operating profit is expected to rise 45% to KRW 1 trillion.
Operating profit was revised down 11% from the previous estimate, largely due to a downward adjustment to the earnings forecast for consolidated subsidiary LG Innotek. Excluding that impact, the major business divisions are still regarded as having solid growth momentum.
Shinhan Investment & Securities particularly highlighted the growth potential of LG Electronics' AI data center cooling solutions business. LG Electronics secured KRW 600 billion in cooling solutions orders during the first half of this year, and the delivery lead time is estimated at six to nine months.
The brokerage explained that LG Electronics' entry into the AI infrastructure value chain is becoming increasingly visible, as the company has been listed as a partner of NVIDIA in network power and cooling and has completed product specification approvals.
Revenue and operating profit in the ES division are expected to increase 17% and 39%, respectively, next year. The robotics business is also progressing smoothly. CLOiD robots at the proof-of-concept (PoC) stage are being mass-produced and deployed for testing, while an actuator pilot production line is being established and initial production is underway.
The earnings outlook was also revised upward. The 2027 revenue estimate was raised 3.6% from KRW 97.2868 trillion to KRW 100.8147 trillion, while the operating profit estimate was increased 19.1% from KRW 4.2829 trillion to KRW 5.0989 trillion. The 2026 operating profit forecast was likewise raised 14.3%, from KRW 4.0282 trillion to KRW 4.6062 trillion.
Oh said, "LG Electronics is a leading information technology (IT) company to watch as it enters the AI value chain," and forecast, "The stock's upward trend will continue as the stable growth of its existing businesses coincides with the increasing visibility of its new businesses."

[email protected] Kang Jung-mo Reporter