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Securities Industry Lowers Target Price of LG Electronics
Below Expectations
Securities Industry Lowers Target Price of LG Electronics
  • By Michael Herh
  • July 11, 2017, 03:15
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The share price of LG Electronics has been falling continuously.
The share price of LG Electronics has been falling continuously.

 

The share price of LG Electronics falls day by day. Securities firms believe that an adjustment of the stock price is inevitable with the current price at a little more than 70,000 won.

At 1:45 pm on July 10, LG Electronics was trading at KRW721,200, down 3.65% from the previous trading day in the stock market. LG Electronics' stock price soared to the second half of the 80,000 won level after it hit 70,000 won in April. The price target of 100,000 won was suggested in the securities market and the stock price continued to rise. However, as the stock price tumbled 12%, there is a concern that the stock price may return to 60,000 won.

Lower-than-expected 2Q earnings suppressed investment sentiment about LG Electronics. Last week, LG Electronics said its 2Q operating profit fell 27.9% quarter on quarter to 664.1 billion won. This was a drop from the estimated operating profit of 766.5 billion won.

In the market, experts say that fundamental strategic changes in the smartphone (MC) business are needed. Some securities firms such as Daeshin Securities, Ebest Securities, and Kiwoom Securities lowered their target price of LG Electronics. "In the second half of 2017, the limitations of its strategic models to compete with Apple's iPhone 8 and Samsung Electronics’s Galaxy Note 8 impeded an increase in sales of the MC Business Division," said Park Kang-ho, a researcher at Daeshin Securities. “"I believe that it is important to build a mobile platform related to smart homes and smart cars than to zero in on smartphone sales in setting a long-term business direction."