[Edaily Reporter Kim Kyung-eun ] On the 8th, SamsungSecurities raised its target price for LGELECTRONICS(066570)by 19.0% from 210,000 won to 250,000 won and maintained its “Buy” rating, despite the company’s weak third-quarter earnings. This decision was based on the clear growth potential of new businesses, such as cooling solutions for artificial intelligence (AI) data centers.

Lee Jong-wook, an analyst at SamsungSecurities, stated in a report released that day, “The key drivers of LGELECTRONICS’ current stock price are not second-half earnings, but rather the steady growth of AI data center cooling solutions and automotive components, as well as the potential for robot commercialization.”

The primary rationale for raising the target price is the growth potential of the cooling solutions business. SamsungSecurities projected that LGELECTRONICS’ revenue from AI data center cooling solutions could expand from approximately 1 trillion won this year to 5 trillion won within the next two years.

The firm noted that an increase in orders for chillers (large-scale cooling units) and air-handling units has already been confirmed, and recently, the scope of orders has begun to expand to include cooling water distribution units (CDUs). It is believed that the expansion of cooling solution revenue could lead not only to increased profits but also to a revaluation of LGELECTRONICS’ business structure.

SamsungSecurities raised its operating profit forecast for LGELECTRONICS next year by 8.1% from its previous estimate to 4.569 trillion won. This reflects the expansion of cooling solution sales and the stabilization of profitability in the Media & Entertainment Solutions (MS) division. The target stock price was calculated by applying a price-to-earnings ratio (PER) of 18 to next year’s estimated earnings per share (EPS) of 14,083 won.

Conversely, the operating profit forecast for this year was revised downward by 6.0% from the previous estimate of 4.46 trillion won to 4.193 trillion won. This revision reflects the impact of third-quarter results falling short of market expectations.

LGELECTRONICS’ third-quarter revenue totaled 23.827 trillion won, an 8.9% increase year-over-year. Operating profit rose 13.5% to 781.8 billion won but fell 26.4% short of SamsungSecurities’ previous estimate.

The Home Appliances (HS) division saw increased profitability volatility due to the burden of raw material and logistics costs. For the Vehicle Components (VS) division, it is estimated that a portion of revenue recognition was carried over to the next quarter. Exchange rates also had a negative impact on the performance of subsidiaries, including LG Innotek. In contrast, the Mobile Solutions (MS) division maintained a stable profit.

SamsungSecurities assessed that this weak performance stemmed from short-term factors such as costs and exchange rates rather than a decline in product competitiveness or growth potential. The firm explained that, since the third-quarter results confirmed that short-term profits have bottomed out, attention should now shift to the expansion of revenue from new businesses.

The analyst stated, “At this point, having confirmed the bottom of short-term earnings, we need to place more emphasis on the increasing visibility of growth in 2027 rather than downward revisions to earnings forecasts.”