LG Electronics Inc.'s target price has been lifted from 112,000 won to as high as 158,000 won per share by local brokerage house eBest Investment & Securities after disclosing a joint venture to manufacture automotive systems for electric vehicles with Canada-based auto parts maker Magna International.
Six other securities firms also upgraded price targets for LG Electronics stock, with Hana Financial Investment raising it from 125,000 won to 153,000 won, and Kyobo Securities from 120,000 won
to 150,000 won.
The announcement boosted LG Electronic's stock by the daily limit of 30 percent from the previous day.
Kyobo Securities analyst Choi Bo-young attributed the promising earnings outlook for LG Electronics’s vehicle component solution to the growing trend of autonomous driving. He added that they expect the business to deliver profit next year.
Noh Kyung-tak of Eugene Investment & Securities estimates LG Electronics would earn 3.88 trillion won from operations next year, up 18.1 percent from this year.
According to Noh, such earning would be made possible from growth in demand for EV components and premium electronics products, and
improvement in smartphone profit structure.
LG Electronics and the world’s No. 3 auto parts maker Magna International will invest $1 billion in a joint venture to become operational in July next year.
