[Edaily KIM YOON-JEONG Reporter] KIWOOM Securities projected that LG Display(034220)’s third-quarter earnings this year will fall short of market expectations due to a decline in the exchange rate, “chipflation,” and reduced demand resulting from rising device prices. The firm noted that despite the unfavorable external environment, the steady shipment volumes of mobile and large-sized organic light-emitting diode (OLED) displays are expected to serve as a basis for a stock price rebound once market conditions improve. It maintained a “Buy” rating with a target price of 11,000 won.

On the 15th, Kwon Min-kyu, an analyst at KIWOOM Securities’ Research Center, projected LG Display’s third-quarter revenue at 6.6745 trillion won and operating profit at 257.2 billion won. These figures represent year-over-year declines of 4% and 40%, respectively. The operating profit margin is expected to be 4%. Operating profit is forecast to fall short of the market consensus of 429.1 billion won.
He cited the sharp drop in the exchange rate, intensifying cost pressures due to “chipflation,” and reduced demand for certain product lines resulting from rising selling prices of finished products as the reasons behind the weak performance. As of September 14, the average won-dollar exchange rate for the third quarter had fallen 5% from the previous quarter and 14% from its peak. Given the industry’s high reliance on exports, analysts note that negative impacts from the falling exchange rate are inevitable.
Rising average selling prices (ASPs) for semiconductor components also pose a burden. The report explains that as cost pressures on non-semiconductor component manufacturers intensify due to “chipflation,” device manufacturers are passing on the increased component costs to consumer prices. Consequently, the firm expects a decline in demand for price-sensitive information technology (IT) and wearable product categories.
On the other hand, shipment volumes are expected to remain robust. Mobile OLED shipments in the second half of the year are projected to increase by 15% year-over-year. This is because, even as global smartphone sales decline, North American mobile customers are pursuing aggressive shipment strategies to capture market share vacated by Chinese smartphone manufacturers.
The company anticipates that high shipment volumes will continue as entry-level models are phased in during the first half of next year, following the release of high-value-added models in the second half of this year. It also forecasts that its position as a major supplier will be sustained, as Chinese panel manufacturers have repeatedly failed in their attempts to enter the market.
Large-sized OLED shipments are also expected to rise by 16% year-over-year, driven by robust sales and demand for OLED monitors. The report noted that the IT liquid crystal display (LCD) business, which had previously struggled, is continuing to recover profitability thanks to an improved product mix focused on high-value-added products.
The firm viewed the stock price as having largely reflected concerns over a deteriorating external environment. The current stock price has corrected by 47% from its peak, falling to a price-to-book ratio (PBR) of 0.7 times based on the estimated book value per share (BPS) for 2026.
The foreign exchange burden is expected to ease somewhat starting in the fourth quarter. While the strong won will negatively impact earnings in the third quarter, the negative effect could diminish starting in the fourth quarter as the company purchases raw materials based on lower exchange rates.
Analyst Kwon stated, “The triggers for a stock price rebound are strong sales from North American mobile clients and the easing trend of chip inflation,” adding, “The key will be maintaining shipment volumes and preventing further declines in profitability.” He continued, “We believe that maintaining robust shipment volumes despite the unfavorable environment will serve as the foundation for a rebound when market conditions improve in the future.”