LG Energy Solution (373220) Earnings: 1Q Net Profit at 226.6 Billion Won Amidst Share Dip

LG Energy Solution on Smartkarma

Analyst coverage of LG Energy Solution on Smartkarma reveals a bearish sentiment among top independent analysts. Sanghyun Park discusses the potential impact of LG Chem’s large-scale EB issuance backed by LG Energy Solution shares, expected before the end of June. Park notes the historical mild price drops of only 3% and 6% post-issuance but warns of more aggressive price action given the current sector sentiment. The timing is deemed crucial, presenting a scenario worth monitoring closely. Additionally, Park highlights LG Chem’s tax concerns, mentioning a possible 200-300 billion KRW tax hit from Pillar Two next year and a probable sale of a stake in LG Energy Solution to shift the tax burden. This insight suggests potential strategies such as shorting LG Energy Solution or considering a long-short with LG Chem to navigate these developments.

Another analyst, Douglas Kim, adds to the negative outlook by discussing the potential impact of Trump’s presidency on the Korean rechargeable battery sector. Kim anticipates further challenges for the sector, attributing it to the potential elimination or reduction of the $7,500 consumer tax credit for electric vehicle purchases under the new administration. This development is expected to lead to a downward revision of earnings estimates by sell-side analysts for key players in the Korean rechargeable battery sector in the upcoming months. The analysis underscores the vulnerability of the sector under the changing regulatory landscape, signaling potential headwinds for LG Energy Solution and its counterparts in the industry.

A look at LG Energy Solution Smart Scores

Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma

LG Energy Solution, a company specializing in battery production, has been evaluated using the Smartkarma Smart Scores. The scores reflect various aspects of the company’s outlook. While LG Energy Solution scores moderately in value and growth, it demonstrates better resilience and momentum in the market. The company’s focus on producing and selling batteries, including those for automobiles, energy storage systems, and other applications, positions it well for long-term success.

Based on the Smartkarma Smart Scores, LG Energy Solution has a mixed outlook. While the company may face challenges in terms of dividends and growth, it is deemed resilient and shows positive momentum in its operations. LG Energy Solution‘s global presence in marketing its battery products further indicates its potential for sustainable growth and competitiveness in the industry.

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