DB:LGLG

Stock Analysis Report

Executive Summary

LG Electronics Inc. manufactures and sells home appliances and air solutions in South Korea, North America, Asia, Europe, South America, the Middle East, Africa, China, Russia, and internationally.


Snowflake Analysis

Excellent balance sheet and fair value.


Similar Companies

Share Price & News

How has LG Electronics's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LGLG's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

3.0%

LGLG

9.7%

DE Consumer Durables

2.2%

DE Market


1 Year Return

-41.1%

LGLG

-24.7%

DE Consumer Durables

-17.2%

DE Market

Return vs Industry: LGLG underperformed the German Consumer Durables industry which returned -22.3% over the past year.

Return vs Market: LGLG underperformed the German Market which returned -17.5% over the past year.


Shareholder returns

LGLGIndustryMarket
7 Day3.0%9.7%2.2%
30 Day-20.9%-14.3%-15.7%
90 Day-37.6%-20.8%-24.0%
1 Year-41.1%-41.1%-22.8%-24.7%-14.9%-17.2%
3 Year-39.5%-41.3%-18.5%-25.4%-16.4%-23.3%
5 Year-36.4%-40.2%-7.8%-20.5%-16.5%-27.8%

Price Volatility Vs. Market

How volatile is LG Electronics's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is LG Electronics undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: LGLG (€6.8) is trading below our estimate of fair value (€31.51)

Significantly Below Fair Value: LGLG is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: LGLG is poor value based on its PE Ratio (285.2x) compared to the Consumer Durables industry average (11.2x).

PE vs Market: LGLG is poor value based on its PE Ratio (285.2x) compared to the German market (16.3x).


Price to Earnings Growth Ratio

PEG Ratio: LGLG is poor value based on its PEG Ratio (4.8x)


Price to Book Ratio

PB vs Industry: LGLG is good value based on its PB Ratio (0.7x) compared to the DE Consumer Durables industry average (1.3x).


Next Steps

Future Growth

How is LG Electronics forecast to perform in the next 1 to 3 years based on estimates from 28 analysts?

59.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LGLG's forecast earnings growth (59.9% per year) is above the savings rate (-0.4%).

Earnings vs Market: LGLG's earnings (59.9% per year) are forecast to grow faster than the German market (14.4% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: LGLG's revenue (3.9% per year) is forecast to grow slower than the German market (4.1% per year).

High Growth Revenue: LGLG's revenue (3.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LGLG's Return on Equity is forecast to be low in 3 years time (9.4%).


Next Steps

Past Performance

How has LG Electronics performed over the past 5 years?

20.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LGLG has a large one-off loss of ₩617.7B impacting its December 31 2019 financial results.

Growing Profit Margin: LGLG's current net profit margins (0.05%) are lower than last year (2%).


Past Earnings Growth Analysis

Earnings Trend: LGLG's earnings have grown significantly by 20.7% per year over the past 5 years.

Accelerating Growth: LGLG's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: LGLG had negative earnings growth (-97.5%) over the past year, making it difficult to compare to the Consumer Durables industry average (-15.9%).


Return on Equity

High ROE: LGLG's Return on Equity (1.1%) is considered low.


Next Steps

Financial Health

How is LG Electronics's financial position?


Financial Position Analysis

Short Term Liabilities: LGLG's short term assets (₩19,738.7B) exceed its short term liabilities (₩17,657.9B).

Long Term Liabilities: LGLG's short term assets (₩19,738.7B) exceed its long term liabilities (₩10,776.8B).


Debt to Equity History and Analysis

Debt Level: LGLG's debt to equity ratio (63.8%) is considered high.

Reducing Debt: LGLG's debt to equity ratio has reduced from 69.6% to 63.8% over the past 5 years.

Debt Coverage: LGLG's debt is well covered by operating cash flow (35.2%).

Interest Coverage: LGLG's interest payments on its debt are well covered by EBIT (9.2x coverage).


Balance Sheet

Inventory Level: LGLG has a high level of physical assets or inventory.

Debt Coverage by Assets: LGLG's debt is covered by short term assets (assets are 1.9x debt).


Next Steps

Dividend

What is LG Electronics's current dividend yield, its reliability and sustainability?

1.56%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: LGLG's dividend (1.56%) isn’t notable compared to the bottom 25% of dividend payers in the German market (1.68%).

High Dividend: LGLG's dividend (1.56%) is low compared to the top 25% of dividend payers in the German market (4.97%).


Stability and Growth of Payments

Stable Dividend: LGLG's dividend payments have been volatile in the past 10 years.

Growing Dividend: LGLG's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (443.8%), LGLG's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: LGLG's dividends in 3 years are forecast to be thoroughly covered by earnings (11.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

0.6yrs

Average management tenure


CEO

Brian Kwon (55yo)

0.25

Tenure

Mr. Bong-seok Kwon, also known as Brian, serves as Chief Executive Officer at LG Electronics Inc. since December 1, 2019. He served as President of Mobile Communications Company at LG Electronics Inc., fro ...


Leadership Team

NamePositionTenureCompensationOwnership
Bong-seok Kwon
Chief Executive Officer0.25yrno datano data
Do-Hyun Jung
President & Representative Director12.17yrsno data0.00080% 48.3k
Doo-yong Bae
Chief Financial Officer0.17yrno datano data
Seung-Kwon Skott Ahn
Chief Technology Officerno datano datano data
Sang-Gyu Choi
Head of Korea Sales Divisionno datano datano data
Young-Soo Kwon
Executive Director1yrno datano data
Ki-Wan Kim
VP & Head of India Corporationno datano datano data
Chongfeng Zhao
Chief Operating Officer of Chinano datano datano data
Soon-Kook Hong
Director of Material/ Production Technology Instituteno datano data0.0029% 175.1k
Hye-Woong Lee
VP & Head of Corporation in Chinano datano datano data

0.6yrs

Average Tenure

61yo

Average Age

Experienced Management: LGLG's management team is not considered experienced ( 0.6 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Do-Hyun Jung
President & Representative Director12.17yrsno data0.00080% 48.3k
Young-Soo Kwon
Executive Director1yrno datano data
Seong-Jin Jo
Vice Chairmanno datano data0.0090% 544.7k
Dae-Hyung Kim
Outside Independent Director3.83yrsno datano data
Yong-Ho Baek
Outside Independent Director2.83yrsno datano data
Joon-Keun Choi
Outside Independent Director2yrsno datano data
Sang-Goo Lee
Outside Independent Director1yrno datano data

2.4yrs

Average Tenure

63yo

Average Age

Experienced Board: LGLG's board of directors are not considered experienced ( 2.4 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.7%.


Top Shareholders

Company Information

LG Electronics Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: LG Electronics Inc.
  • Ticker: LGLG
  • Exchange: DB
  • Founded: 1958
  • Industry: Consumer Electronics
  • Sector: Consumer Durables
  • Market Cap: ₩8.158t
  • Listing Market Cap: ₩6.039b
  • Shares outstanding: 180.07m
  • Website: https://www.lg.com

Number of Employees


Location

  • LG Electronics Inc.
  • LG Twin Tower 128
  • Yeoui-daero
  • Seoul
  • South Korea

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LGLDLSE (London Stock Exchange)GDR ECH REP 1/2 NV STK KRW5000 144AGBUSDAug 2000
LGLGDB (Deutsche Boerse AG)GDR ECH REP 1/2 NV STK KRW5000 144ADEEURAug 2000
LGLDLBATS-CHIXE (BATS 'Chi-X Europe')GDR ECH REP 1/2 NV STK KRW5000 144AGBUSDAug 2000
LGLGWBAG (Wiener Boerse AG)GDR ECH REP 1/2 NV STK KRW5000 144AATEURAug 2000
A066570KOSE (Korea Stock Exchange)YesCommon StockKRKRWApr 2002
A066575KOSE (Korea Stock Exchange)Preferred StockKRKRWApr 2002

Biography

LG Electronics Inc. manufactures and sells home appliances and air solutions in South Korea, North America, Asia, Europe, South America, the Middle East, Africa, China, Russia, and internationally. Its home appliance and air solution products include refrigerators, washing machines, residential and commercial air conditioners, microwaves, vacuum cleaners, air purifiers, dehumidifiers, and others. The company also offers home entertainment products comprising TVs, monitors, PCs and accessories, audio and video products, and others. In addition, it provides mobile telecommunications equipment; vehicle components; and information displays, solar panels, and others. Further, the company offers LED products, camera modules, substrates and materials, motors/sensors, and others. Additionally, it is involved in the equipment production activities; wholesale and retail of electronic products; investment activities; and provision of maintenance, marketing, business facility maintenance, and automotive engineering services, as well as in the real estate business. LG Electronics Inc. was founded in 1958 and is based in Seoul, South Korea. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/31 20:55
End of Day Share Price2020/03/31 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.