LG Shares Rally to Best Day in Months as Earnings Prospects Brighten

By Kwanwoo Jun

LG Electronics shares notched their best day in three months on improved earnings prospects following a profit turnaround in the first quarter.

The stock surged 18% to close at 184,900 won, equivalent to $125.41, on Tuesday, the steepest daily gain since Feb. 11. By comparison, the benchmark Kospi fell 2.3%.

Analysts attributed the rally to the South Korean consumer-electronics giant's first-quarter results and a continued market rerating as the company expands its presence in the artificial-intelligence and robotics sectors.

LG Electronics recorded a net profit in the three months ended March after falling into the red in the previous quarter. The swift turnaround has raised hopes of an earnings recovery this year.

Shares in the company have now doubled this year, reflecting improving investor confidence in its earnings recovery potential. LG has maintained resilient growth in its core home-appliance and television segments while continuing to expand into new businesses, such as vehicle components, heat pumps, robotics and AI data-center cooling systems.

LG said Tuesday that a United Arab Emirates delegation of investors and government officials visited one of its Korean plants with assembly lines for its heating, ventilation and air-conditioning systems used in AI data centers and commercial buildings.

The company said it views the Middle East as one of its major expanding data-center markets, where global big tech companies continue to build out AI infrastructure.

Seoul-based Eugene Investment & Securities analyst J.H. Lee said he expects LG to post a second-quarter earnings beat, pointing to the likelihood of one-off gains from U.S. tariff refunds. Companies that paid President Trump's sweeping global tariffs are starting to get their money back from this week, after the Supreme Court in February struck down the levies.

Eugene Investment raised its target price for LG by a sharp 48% to 195,000 won and maintained a buy rating.

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(END) Dow Jones Newswires

05-12-26 0517ET