IBK Securities, LG Display target price ↓… “Slow performance expected in the third quarter”

IBK Investment & Securities announced on the 14th that it lowered its target stock price for LG Display [034220] by 23% to 13,000 won. The investment opinion was maintained at 'buy'.

Researcher Kang Min-gu predicted, “Sales and operating profit in the third quarter of 2026 will fall 6.5 trillion won and 257.4 billion won, respectively, down 6% and 40% from the same period last year, falling below market expectations.”

He explained, “The reason why we expect sluggish performance compared to the consensus (market average forecast) is because of the panel price cut (due to a decrease in consumption) due to chip inflation (semiconductor price increase) and the strong won.”

The third quarter of this year is the peak season for the launch of new mobile products for North American customers, but due to the rise in memory prices, the pressure to reduce component prices is believed to have been stronger than in previous years, and the exchange rate is also a factor.

Researcher Kang said, "The company's operating profit fluctuates around 6 to 7 billion won per 10 won in exchange rate, and as the exchange rate plunges by more than 100 won this quarter, a decline in operating margin is expected to be inevitable."

He said, “Performance fluctuations due to external variables are expected to continue,” and added, “Efforts to reduce fixed costs that have continued for several years and the effects of improving the company’s fundamentals centered on organic light-emitting diodes (OLED) have become visible, but external variables such as chip inflation, exchange rates, and decreased demand for smartphones are now obstacles.”

In particular, he said, “We expect smartphone shipments from strategic customers in North America to be slower than expected,” and “we lowered our annual operating profit forecast from KRW 960 billion to KRW 617 billion.”

Researcher Kang warned, "Due to the nature of the IT set business, the decline in finished product shipments is directly connected to pressure to reduce panel and component prices. A decrease in demand is also observed across non-essential IT products such as tablets and watches, so it is time to worry about not only a decline in operating profit margin but also a decline in sales."

LG Display's current stock price is 7,560 won based on the previous trading day's closing price.