[Featured stock] LG Household & Health Care plummets by more than 10% due to performance below expectations

The stock price of LG Household & Health Care [051900], whose 3rd quarter performance fell short of market expectations, is plummeting by more than 10% during the day on the 4th.

As of 10:08 am on this day, LG Household & Health Care is trading at 232,500 won in the stock market, down 11.26% from the previous day.

The stock price started at 250,000 won (-4.58%) and fell 13.17% to 227,500 won at one point in early trading. This is the lowest intraday price recorded in about four months since June 30th.

LG Household & Health Care announced the previous day that its consolidated operating profit for the third quarter was 70.4 billion won. This is 30.5% lower than the market consensus (forecast).

Accordingly, securities companies appear to be lowering their target stock prices.

Park Jong-dae, a researcher at Hana Securities, said that LG Household & Health Care recorded an 'earnings shock' in the third quarter of this year, and pointed out that "the main factor was the decline in profitability in the cosmetics division."

Researcher Park explained, “It is estimated that the Chinese and U.S. businesses recorded operating losses similar to the third quarter of the previous year. In particular, the burden of the Chinese business continues, so we are implementing channel restructuring, but we are unable to find a clear way to turn around performance.” At the same time, the target stock price was lowered from 320,000 won to 270,000 won, and the investment opinion was lowered from 'buy' to 'neutral'.

LS Securities researcher Orina also downgraded her investment opinion on LG Household & Health Care from ‘buy’ to ‘hold’. The target price was lowered from 350,000 won to 260,000 won.

Researcher Oh predicted, “The deficit in the cosmetics business is expected to continue to decline in the fourth quarter of this year, but recovery in top-line growth will still be limited.” Specifically, he said, "The impact of the reduction of low-profit live broadcasts will continue in China, and a decrease in sales will inevitably be expected in North America due to the sale of Avon."

Kiwoom Securities researcher Son Ye-bin also lowered the target stock price from 330,000 won to 280,000 won and downgraded the investment opinion by two levels from 'buy' to 'market perform'.

In addition, Meritz Securities successively lowered its target price to 320,000 won, Korea Investment & Securities and Sangsang Certificates to 310,000 won each, NH Investment & Securities to 300,000 won, Hyundai Motor Securities to 260,000 won, and Daol Investment & Securities to 230,000 won.