SK Securities lowers LG Display target... “3rd quarter performance expectations ↓”

On the 8th, SK Securities lowered its target stock price for LG Display [034220] from 16,000 won to 12,500 won, saying that its third quarter operating profit would be 233.6 billion won, which would fall below market expectations. The closing price the previous day was 8,250 won.

Researcher Park Hyeong-woo explained, “There is an impact of the decline in the won/dollar exchange rate,” and “when the exchange rate fluctuates by 10 won, monthly operating profit has shown a sensitivity of 5 to 8 billion won.”

In addition, he said, “Small panel customers are requesting a price reduction due to the rising cost of many components, including memory,” and “in the tablet and PC markets, this cost burden is being passed on to consumers and demand is decreasing.”

At the same time, he added, “It is inevitable to lower the fourth quarter (operating profit) forecast to 201.8 billion won,” adding, “We took into account the uncertainty of orders for global sets and smartphone parts from North American customers.”

He then said that future stock price variables depend on next year's investment.

He explained, “After years of efforts to improve finances, we are looking for growth plans (next year),” and added, “The conditions for valuation re-rating depend on the visibility of whether new investments will return to profitability.”