Hanwha Investment & Securities on Wednesday advised a cautious approach to LG Household & Health Care until its sales decline reverses, keeping its “hold” rating. It cut its target price to 230,000 won from 300,000 won.
Analyst Han Yu Jeong said the company’s consolidated operating profit for the fourth quarter of 2025 was minus 72.7 billion won, far below the consensus estimate of 4.2 billion won, citing weakness across its Beauty, HDB and Refreshment divisions.
On news of LG H&H’s acquisition of Torriden, Han said buying a Korean indie brand could be aimed at rebuilding the Beauty business, but added that further deals are not a priority given weak results from past M&A, including Boinca, The Crème Shop and AVON. “Reorganizing the current brand portfolio, channels, SKUs and fixed-cost structure to normalize profitability should come first,” he said.
Han said labor and marketing costs reflected in 2025 are unlikely to be one-off items, and that restructuring-related expenses are likely to continue at least through the end of 2026.
He added that Hanwha does not expect a return to normal profit levels through 2026 and therefore shifted the target-price valuation base to 2027 results.
* This article has been translated by AI.
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