[Edaily Reporter PARK MIN ] On the 8th, Shinhan Investment Securities maintained its “Buy” rating and target price of 500,000 won for LG Energy Solution(373220), noting that following better-than-expected third-quarter earnings, both energy storage system (ESS) orders and improved profitability are expected to come into focus in the second half of the year. This represents an upside potential of 27.9% compared to the previous trading day’s (October 7) closing price of 391,000 won.

Lee Jin-myung, a senior analyst at Shinhan Investment Securities, stated in a report published that day, “We expect the remaining projects—excluding the approximately 30 GWh secured in the first half of the year out of the 90 GWh new order target—to be concentrated in the second half of the year,” adding “Production capacity in North America is set to expand to over 50 GWh by the end of this year, and with bottlenecks in battery packs and links easing, the company is expected to return to profitability in the fourth quarter even excluding the Advanced Manufacturing Production Credit (AMPC).”

According to Shinhan Investment Securities, LG Energy Solution’s third-quarter consolidated revenue is estimated at 9.0424 trillion won, a 19.6% increase from the previous quarter, while operating profit is projected to surge 189.1% to 327.5 billion won. This is in line with the market consensus (operating profit of 321.7 billion won).

By business segment, the mid-to-large-sized battery division is expected to return to profitability. Third-quarter revenue for mid-to-large-sized batteries is projected to reach 6.602 trillion won, a 27% increase from the previous quarter, with operating profit expected to total 134.4 billion won. The EV battery segment significantly reduced its loss due to the reflection of compensation from major customers, a recovery in shipments to Europe, and the restart of the joint venture (JV) with General Motors (GM). ESS revenue is projected to reach 3.018 trillion won, a 38% increase from the previous quarter, driven by the easing of pack production bottlenecks.

The small-format battery segment also continues to show steady growth. Third-quarter revenue for small-format batteries is estimated at 2.44 trillion won, with operating profit at 193.1 billion won—representing increases of 4% and 18%, respectively, compared to the previous quarter. As a result of continued strong shipments of cylindrical batteries driven by rising Tesla sales in key regions such as Europe and China, the operating profit margin is expected to improve to 7.9%, up 0.9 percentage points from the previous quarter.

The company’s medium- to long-term growth momentum is also viewed as solid. Shinhan Investment Securities forecasts that earnings will be driven by the expansion of North American production capacity to over 50 GWh by the end of this year, the normalization of profitability following the expansion of ESS capacity in North America in 2027, and the full-scale mass production of the 46-series cylindrical batteries.

Shinhan Investment Securities projected LG Energy Solution’s 2026 annual revenue at 33.0501 trillion won and operating profit at 895.2 billion won. It further analyzed that in 2027, the company will achieve revenue of 38.3986 trillion won and operating profit of 4.0921 trillion won, marking the start of a full-scale quantum leap.

Analyst Lee Jin-myung stated, “In the short term, ESS and cylindrical batteries will underpin earnings, while in the medium to long term, growth will be driven by the expansion of ESS in North America and the 46 Series.” He added, “If improvements in profitability are confirmed following large-scale ESS orders and the resolution of production bottlenecks, a full-scale revaluation of the company’s stock will begin.”