On Thursday, Citi issued a downgrade for LG Display (NYSE:LPL) Co Ltd. (034220:KS) (NYSE: LPL), moving its stock rating from Buy to Sell. The firm also significantly reduced its price target for the company's shares, from KRW18,000.00 to KRW7,000.00. The downgrade follows LG Display's reported operational loss for the third quarter of 2024.
The operational loss posted by LG Display amounted to W81 billion, which has been attributed to ongoing weaknesses in the IT OLED demand, particularly within the tablet sector. Additionally, the company incurred a one-off expense surpassing W100 billion due to voluntary retirements.
Despite LG Display's initiatives to enhance operational efficiency and expand its market share through its relationship with Apple (NASDAQ:AAPL), the company is expected to encounter intense competition. Rivals such as BOE and Samsung (KS:005930), along with a tough Chinese display market, are poised to challenge LG Display's market position.
The revised price target is based on a price-to-book valuation method. Citi's stance reflects concerns over LG Display's ability to navigate an increasingly competitive landscape and the impact of market dynamics on its financial performance.
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