LG Display 2Q26 Below Expectations; Goldman Sachs Cuts Target Price but Maintains Neutral

Overview

This is a company research and earnings review report on LG Display by Goldman Sachs. The core conclusion is that 2Q26 results were superficially below expectations mainly due to a one-off voluntary retirement cost. Although the OLED shipment outlook has improved, weak ASP guidance and increased pricing pressure led Goldman Sachs to lower its 2H26 and full-year earnings estimates and reduce the target price from W13,500 to W11,600, while maintaining its Neutral rating.

Core views

Goldman Sachs believes LG Display's operating trends are improving year on year, but not sufficiently to support a more positive rating. Smartphone OLED shipments are supported by iPhone 17 sales, the ability to mass-produce upgraded specifications, and an improved competitive landscape, leading to an upward revision in shipment expectations. Large-size OLED is also expected to see better growth and margin improvement, driven by the World Cup event effect and demand for OLED gaming monitors. However, the company's 3Q26 ASP guidance is weaker than expected, indicating that customer cost pressure and panel pricing pressure remain strong. Tablet OLED demand is soft in the absence of a new iPad Pro launch this year and is expected to weigh on business profitability.

Analysis framework

The report forms its investment conclusion through earnings decomposition, adjustments to segment-level shipment and ASP assumptions, earnings forecast revisions, and a 12-month forward P/B valuation framework. Goldman Sachs focuses on comparing actual 2Q26 operating loss with consensus expectations and its own forecast, incorporating one-off expenses, smartphone OLED, large-size OLED, Tablet OLED, and ASP changes into its 2026-2028 earnings forecasts.

Methodology notes

• Valuation methods12-month forward P/B valuation

  Target P/B multiple of 0.9x

  Goldman Sachs maintains a target P/B multiple of 0.9x, but lowers the 12-month forward P/B-based target price to W11,600 due to changes in earnings forecasts and book value assumptions.

• Factor AnalysisGS Factor Profile

  Four attribute categories: Growth, Financial Returns, Multiple, and Integrated

  The Goldman Sachs Factor Profile compares individual stocks relative to the market and industry peers based on growth, financial returns, valuation multiples, and integrated indicators.

• M&A ProbabilityM&A Rank

  M&A Rank 3

  The report discloses an M&A Rank of 3 for LG Display, indicating a low probability of acquisition and that it is generally not included in target price calculations.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• LG Display (034220.KS)

  Subject company and stock covered by the report

  Strengths

  Leading market share in OLED TV panels; upgraded smartphone OLED shipment outlook; large-size OLED supported by demand for OLED gaming monitors; continued transition from LCD to OLED.

  Weaknesses

  Operating loss in 2Q26; ASP guidance below expectations; weak Tablet OLED demand; 2026E EPS revised down to a loss.

  Comparison

  Maintains a Neutral stance relative to the Goldman Sachs coverage universe; current 12-month forward P/B is approximately 0.7x, versus a target valuation multiple of 0.9x.

  Risks

  IT LCD panel price fluctuations, TV OLED shipments below or above expectations, OLED pricing pressure, and changes in key customer demand.

Key data

• 12-month target priceW11,600Lowered from W13,500 previously; based on a 0.9x target P/B.
• Current priceW10,110Price disclosed on the report cover.
• Implied upside14.7%Based on the W11,600 target price and W10,110 current price.
• 2Q26 revenueW5.6tnQuarterly revenue disclosed by LG Display.
• 2Q26 operating lossW108bnClose to the Bloomberg consensus loss of W110bn, but weaker than Goldman Sachs' forecast loss of W80bn.
• One-off voluntary retirement costW240bnExcluding this one-off cost, normalized operating profit was approximately W130bn.
• Smartphone OLED shipment forecast86mn unitsRaised from 82mn units, with expected year-on-year growth of 13%.
• Large-size OLED shipment forecast7.5mn unitsExpected year-on-year growth of 17%, mainly driven by OLED gaming monitors.
• Tablet OLED shipment forecast3.2mn unitsLowered from 4mn units, with an expected year-on-year decline of 26%.
• 3Q26 operating profit forecastW400bnLowered from W564bn previously.
• 2026 full-year operating profit forecastW958bnLowered from W1.2tn previously.
• 2026E/2027E/2028E EPSKRW -662 / 1,505 / 1,843Previous forecasts were KRW 251 / 2,093 / 2,221.
• Market capitalizationW3.9tr / $2.6bnDisclosed on the report cover.
• Enterprise valueW16.1tr / $10.9bnDisclosed on the report cover.

Impact & implications

The report's implication for LG Display is neutral overall: the OLED transition continues, smartphone and large-size OLED have shipment improvement momentum, and the completion of depreciation at the Guangzhou OLED TV plant should also support large-size OLED margins. However, ASP pressure, weak Tablet OLED demand, and downward earnings revisions limit the scope for valuation recovery. For investors, the near-term focus should shift from shipment improvement alone to whether shipments, pricing, and margins can improve in tandem.

Risks

• IT LCD panel prices may be above or below expectations.
• TV OLED shipments may be above or below expectations.
• ASP pressure for smartphone and tablet OLED may be stronger than expected.
• Tablet OLED demand may remain weak due to the lack of a new iPad Pro launch.
• One-off restructuring costs and the pace of business transformation may affect near-term earnings performance.

What to watch

• Whether 3Q26 overall ASP achieves only high-teens sequential growth or exceeds company guidance.
• Whether iPhone 17 sales and actual smartphone OLED shipments can support the 86mn-unit forecast.
• Whether OLED gaming monitor demand and large-size OLED shipments can reach 7.5mn units.
• Whether Tablet OLED demand continues to decline and leads to a full-year operating loss in the segment.
• Whether full-year 2026 operating profit can reach Goldman Sachs' revised forecast of W958bn.
• Whether the 0.9x target P/B valuation can be supported by earnings recovery and the realization of the OLED transition.