After LG Electronics announced its second-quarter earnings surprise, domestic and international brokerages moved to significantly raise their target prices. The revisions reflect expectations that beyond the earnings beat, the company’s future new businesses—including robotics and data center cooling solutions—will gain full momentum, supported by solid profitability in its core operations.
According to South Korea’s financial investment industry on July 9, six out of seven domestic securities firms that published corporate analysis reports following LG Electronics’ preliminary Q2 results—Hyundai Motor Securities, DB Financial Investment, Samsung Securities, Daol Investment & Securities, Yuanta Securities, and Daishin Securities—raised their target prices. Only Hana Securities maintained its existing target price of ₩260,000 (approximately $173.04). The average target price across these seven firms reached ₩246,400 (approximately $163.98), an increase of more than ₩75,000 (approximately $49.91) from the previous level. Foreign brokerages including HSBC and CGSI also raised their target prices to ₩280,000 (approximately $186.35) and ₩270,000 (approximately $179.69), respectively.
The market’s attention focused less on the “numbers” revealed in this earnings release and more on the underlying “structural shift.” Daol Investment & Securities noted in its report, “What is more important than the surprise is the structural change,” adding, “The company’s foundational strength has been confirmed, with core businesses serving as stable cash cows that can support investment capacity for new ventures.”
In fact, LG Electronics’ Q2 revenue and operating profit reached ₩23.83 trillion (approximately $15.9 billion) and ₩1.58 trillion (approximately $1.1 billion), respectively—record highs for any second quarter. At the heart of this strong performance was the simultaneous growth of the Home Appliance (HS) and Vehicle Component Solutions (VS) businesses. The HS division benefited from a stable revenue base in developed markets such as North America and Europe, along with an effective revenue diversification strategy into emerging markets. The VS division was assessed to have entered a stable growth trajectory by responding to expanding demand for premium infotainment systems.
Daishin Securities analyzed, “Even excluding tariff refund effects, the HS and MS (TV) divisions’ revenue and operating profit exceeded market expectations,” adding that “new growth businesses are also progressing smoothly, with active pursuit of global partnerships in the AI sector and the robotics business.”
Among the new ventures, expectations for data center cooling solutions are rapidly expanding. Daol Investment & Securities projected that if hyperscaler orders from big tech companies are secured in the second half of this year, they could translate into revenue starting in the second half of 2027. The firm also analyzed, “As the Asian market expands, opportunities are opening for Taiwanese and South Korean companies to increase market share in a landscape previously centered on North American and European cooling solution providers,” noting that “LG Electronics is positioned to benefit.”
Securities firms’ assessments of the robotics business are also positive. Regarding the robot components business, Yuanta Securities noted that the company “possesses technical strengths including efficiency advantages on a same-size basis and utilization of existing heat dissipation technology,” forecasting that revenue contributions will become visible starting next year once the pilot line begins operations in the second half.
LG Electronics is also accelerating the execution of its robotics business. Through a recent one-point organizational restructuring, the company established a Robotics Business Center reporting directly to the CEO and appointed Song Si-yong as its head. The strategy is to accelerate commercialization by consolidating functions including business development, sales, and operations. At the Seocho-gu Yangjae R&D Campus in Seoul, a large-scale data factory for robot learning is under construction with a target to begin operations within the year, and industry estimates suggest related investments will exceed ₩400 billion (approximately $266.2 million) by 2030.
LG Electronics President Ryu Jae-cheol has consistently expressed strong commitment to the physical AI business. At the regular shareholders’ meeting in March, Ryu stated, “We will make this year the inaugural year for ‘full-scale robotics business’ and execute detailed strategies with speed.” On the 26th of last month, he also emphasized via LinkedIn, “Physical AI and humanoid robots will ultimately become important components of everyday environments,” adding, “As a company that simultaneously possesses rich real-world data, spatial expertise, execution capabilities, and a full-stack AI ecosystem, LG Electronics is uniquely positioned as a decisive partner in the physical AI era.”
Meanwhile, industry observers anticipate that LG Electronics’ corporate value will undergo another revaluation once future businesses such as robotics and data center cooling solutions begin delivering tangible results. The analysis suggests that the stable cash flow generated by the two major cash cows—home appliances and vehicle components—will directly fuel large-scale investments in future core technologies like physical AI, accelerating the transition toward a “future-oriented business portfolio” that will drive mid- to long-term growth.