LG Energy Solution Ltd

373220: XKRX (KOR)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	₩928,646.00	Xmlxl	Vqtrzlc

LG Energy Solution Earnings: Revenue and Profit Missed on Weak EV Battery Pricing and Competition

Vincent Sun

Jul 26, 2024

June-quarter revenue and operating profit for no-moat LG Energy Solution were both weaker than we expected. Management attributed the year-over-year revenue decline to weak battery demand from electric vehicles and a decline in battery price due to a prolonged lithium price drop. We revise down our 2024-28 revenue estimates by 11%-23% on reduced outlook for EV battery demand and price trend. To factor in the margin weakness in EV battery and cylindrical battery sales, but partly offset by the increased United States government tax rebate assumptions, we reduce our 2024-28 operating income forecast by 9%-24%.

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