Shinhan Investment & Securities raised its target price for LG Electronics (KOSPI: 066570) from 180,000 won to 290,000 won on 2nd October 2026, a 61% increase, while maintaining its buy recommendation. Based on the stock's closing price of 211,500 won on 1st October, the implied upside is 37.1%.
The new target is derived by applying a price-to-book (P/B) multiple of 1.8 times to LG Electronics' projected book value per share of 158,572 won for 2027. That multiple matches the peak P/B average the company achieved during its previous growth phase of 2020–21 and is 41% higher than the multiple used previously. The rationale is not simply an upgrade of earnings forecasts but a revaluation of the company's newer business lines.
Oh Kang-ho, a research director at Shinhan Investment, argues that the key driver of LG Electronics' share price is shifting away from the core home-appliance (HS) and vehicle-component (VS) divisions towards a valuation of its robotics and heating, ventilation, and air-conditioning (HVAC) businesses. He expects the period from the fourth quarter of 2026 to the first quarter of 2027 — including CES early next year — to provide the catalyst for that rerating, as order momentum builds.
Data-centre cooling emerges as a tangible revenue driver
In the energy solutions and HVAC segment (referred to internally as ES), the report notes that LG Electronics secured 600 billion won in cooling-solution orders in the first half of 2026 alone. With delivery lead times estimated at six to nine months, these contracts are expected to begin contributing to revenues from the fourth quarter of this year. The company has been formally listed as an official partner to Nvidia in the network power and cooling space, and product-level specifications have received regulatory approval. For 2027, ES segment revenues and operating profit are forecast to grow 17% and 39% respectively year on year.
Robotics: promising, but still at proof-of-concept stage
The robotics business is also moving into a more concrete phase. LG Electronics' CLOi robots are being deployed in mass-production configurations for proof-of-concept testing, while a pilot production line for actuators is under construction and initial output has begun. That said, the division's immediate task is demonstrating the pace of commercialisation rather than delivering profits.
Third-quarter earnings estimate trimmed, but for external reasons
For the third quarter of 2026, Shinhan forecasts revenues of 24.1327 trillion won (up 10% year on year) and operating profit of 1.0013 trillion won (up 45%). However, the operating profit estimate has been cut by 11% from the previous forecast, largely because of a sharp reduction in the expected earnings of LG Innotek, a consolidated subsidiary. LG Innotek's projected operating profit was revised down from 304 billion won to 156.9 billion won, reflecting uncertainty over shipment timing and volumes for a major customer's new product. The report is careful to note that this revision is unrelated to the fundamentals of LG Electronics' own operating divisions.
Annual forecasts lifted sharply
Full-year estimates have also been raised. Revenue for 2026 is now forecast at 96.2684 trillion won, 3.1% above the previous estimate of 93.3528 trillion won, while operating profit has been revised up 14.3% to 4.6062 trillion won. For 2027, revenues are projected at 100.8147 trillion won with operating profit of 5.0989 trillion won. Compared with the 2025 operating profit of 2.4784 trillion won, that implies an 85.9% increase in 2026 and a further 10.7% gain in 2027.
The trajectory of profitability is equally striking. LG Electronics' operating margin is forecast to improve from 2.8% in 2025 to 4.8% in 2026 and 5.1% in 2027. Return on equity is projected to more than double, from 4.3% in 2025 to 9.2% in 2027. On current prices, the stock trades at a projected 2027 P/E of 15.5 times and P/B of 1.3 times.
Risks worth noting
Investors should weigh several caveats. The P/B multiple of 1.8 times used to justify the target price was drawn from the peak of the 2020–21 technology and semiconductor valuation cycle, when global liquidity conditions were unusually accommodative. Whether markets are prepared to award similar multiples today is uncertain. LG Innotek's earnings volatility also structurally affects LG Electronics' consolidated results, and seasonal swings can be sharp.
The 600 billion won in HVAC cooling orders assumes continued robust investment in AI data centres. If that investment cycle decelerates, or if competition from Samsung Electronics and specialist global cooling firms intensifies, the ES division's order momentum could slow. The robotics business, still at proof-of-concept stage, is some way from making a material contribution to profits.
LG Electronics' market capitalisation stood at 34.4501 trillion won as of 1st October, with foreign investors holding a 30.0% stake. Over the past twelve months, the share price has risen 181.6% in absolute terms, outperforming the KOSPI benchmark by 39.6 percentage points.