Despite Growth, LG’s Target Stock Price Takes a Price Drop

LG has met with great success in the past few years. While they may not be launching a fleet of Bowing 747 aircraft to deliver their upcoming LG G4 flagship device, which is set to be announced on the 28th of April this year, they are still expected to make a solid showing in the smartphone market. LG has set their sights on 10 million units for their next device, a solid a respectable showing. However, despite this projected sales boost, some analysts seem to think that LG may not make as much as they had previously thought. As a result, some market analysts have bumped the value of LG’s stocks down a notch despite the valuation increase as a result of their smartphone sales.

According a report from Business Korea, Daishin Securities analyst Park Gang-ho feels the annual sales of the LG G4 will reach 8.4 million. That projection represents a decent sized gap between the numbers that LG is expecting to get from the sales of their new device. Keep in mind those numbers are units sold, not units shipped. The difference being that not all units that are shipped get sold. We are talking about what is actually sold, or units that make their way to a consumer’s hand. Though 8.4 million is still a strong representation considering the popular LG G3 sold just close to 6 million devices. He also noted that despite the fact that the Samsung Galaxy S6 will have a huge market presence in 2015, LG will improve its market share while continuing it’s increasing profitability.

So why has LG’s stock received a slight devaluation? The issue at hand is the other products that LG sells. While LG is forecasted to have sold 16.06 million smartphones – a 4.6 percent increase from quarter 4 of 2014 – in the first quarter of the year, poor sales with their television product lines and price competition have caused Daishin Securities to predict that figures will be lower than previously thought. The company has devalued the stock target price from $78.67 to $72.34. As stated, this is largely due to poor television sales in Europe as well as the domestic market which “will have adverse effects on the home entertainment and the MC sectors, respectively.”

No one expects LG to sell as many units as Samsung this year given the popularity of the upcoming Samsung Galaxy S6, but LG will still make their way to the top of the list in many markets, and will be the number three manufacturer overall. It should be noted that the first quarter is notoriously slow, so we could see LG’s target stock prices rise, especially with the release of the LG G4 this summer. Despite their poor TV sales, it should still be a good year for LG as the company will no doubt continue its steady climb up the smartphone and consumer electronics ladder.

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