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[EQUITIES] ‘Smartphone woes will continue to plague LG’

[THE INVESTOR] LG Electronics’ third-quarter earnings were dragged down by the continuing underperformance of its smartphone division, said NH Investment and Securities as it knocked down the target price to 68,000 won (US$59.35) from 80,000 won on Oct. 28.

Its operating profit fell 4 percent to 283.2 billion won and sales were down 6 percent to 13.2 trillion won. The figures will further shrink in the fourth quarter, said analyst Go Jeong-u, predicting that “its smartphones will keep posting loss and home appliances and home electronics will make less profit due to rising costs.”

The stock price has hit the bottom but there is no short-term catalyst that will boost it up, Go said. Adding that home electronics has a potential to grow and become more competitive, the analyst maintained a “buy” recommendation. 

By Hwang You-mee (