[Edaily Reporter Shin Ha-yeon ] On the 14th, NH INVESTMENT & SECURITIES assessed that concerns regarding L&F(066970)’s dual-client strategy had been largely factored into the recent stock price correction and maintained its “Buy” investment rating. However, reflecting the decline in lithium prices, it lowered the target price by 16% from 190,000 won to 160,000 won.

Joo Min-woo, an analyst at NH INVESTMENT & SECURITIES, said, “While we have slightly revised down sales prices and profitability to reflect the recent decline in lithium prices, our sales volume assumptions remain unchanged,” adding, “As Tesla’s strong sales in Europe and Asia continue, a positive spillover effect is extending not only to LG Energy Solution but also to L&F.”

Analyst Joo projected that Tesla’s growth momentum will continue into next year. He noted, “Tesla’s growth in Europe and Asia will remain robust in 2027 as the number of countries approving Full Self-Driving (FSD) expands,” but added, “Due to the customer’s diversification strategy, LG Energy Solution’s market share for cathode materials supplied to Tesla is expected to drop to around 70%.” Accordingly, he estimated 2027 revenue at 3.3 trillion won, which is below the market consensus of 4 trillion won.

However, securing new customers was cited as a key variable affecting future earnings and stock prices. Analyst Ju said, “Given the recent sharp stock price correction, concerns about the dual-sourcing strategy appear to have been largely priced in,” adding, “If the prospects for direct supply to Tesla in North America or supply from Panasonic to North America become clearer, the earnings outlook could be revised upward again.”

For the second quarter, revenue is expected to exceed market expectations, but profitability is projected to be somewhat weak. For the second quarter, revenue is projected at 917.1 billion won and operating profit at 27.5 billion won. While revenue is expected to exceed the consensus, operating profit is forecast to fall short of market expectations due to an inventory valuation loss of approximately 7.3 billion won resulting from falling lithium prices. However, Analyst Ju explained, “Excluding the inventory valuation loss, operating profit is expected to reach 35 billion won, an improvement over the previous quarter’s 24.7 billion won.”