Fact based stock research
LG Chem (KOSE:A051910)

KR7051910008

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

LG Chem stock research in summary

lgchem.com

ANALYSIS: With an Obermatt Combined Rank of 23 (worse than 77% compared with investment alternatives), LG Chem (Commodity Chemicals, South Korea) shares have lower financial characteristics compared with similar stocks. Shares of LG Chem are low in value (priced high) with a consolidated Value Rank of 31 (worse than 69% of alternatives), show below-average growth (Growth Rank of 27), and are riskily financed (Safety Rank of 45), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 23, is a sell recommendation based on LG Chem's financial characteristics. As the company LG Chem's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 31), low growth (Obermatt Growth Rank of 27), and risky financing practices (Obermatt Safety Rank of 45), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	31
Growth Rank	27
Safety Rank	45
Combined Rank	23

Country	South Korea
Industry	Commodity Chemicals
Index	Low Emissions, Energy Efficient, Low Waste, Recycling, KOSPI
Size class	XX-Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: LG Chem

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	34	13	39	31
GROWTH
GROWTH	33	71	61	27
SAFETY
SAFETY	19	14	60	45
SENTIMENT
SENTIMENT	n/a	46	86	^new
360° VIEW
360° VIEW	n/a	7	71	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better LG Chem is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	34	13	39	31
GROWTH
GROWTH	33	71	61	27
SAFETY
SAFETY	19	14	60	45
COMBINED
COMBINED	32	8	60	23

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of LG Chem the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 31 (worse than 69% compared with alternatives), LG Chem shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where the majority of metrics are below, and only one is above average for LG Chem. Price-to-Sales (P/S) is 51, which means that the stock price compared with what market professionals expect for future sales is lower than 51% of comparable companies, indicating a good value concerning to LG Chem's revenue size. But all other performance indicators point in a different direction. Dividend yields have a Dividend Yield rank of 22, meaning that dividends are expected to be lower than for 78% of comparable investments. Furthermore, Price-to-Book Capital (also referred to as market-to-book ratio) is less favorable than 60% of alternatives (only 40% of peers have an even higher ratio). The same is valid for Price-to-Profit (or Price / Earnings, P/E), which is higher than for 75% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 31, is a hold recommendation based on LG Chem's stock price compared with the company's operational size and dividend yields. Since Price-to-Sales is a stable value indicator even in challenging times, investing in LG Chem could be seen as a value investment. However, there must be a good reason for the low market-to-book rank. If the company has a typical capital investment practice, the stock may be overvalued because the profit and dividend-related performance indicators are also low. The stock is only good value if investors can expect profits and dividends to pick up in the future. Else, LG Chem looks like an expensive investment today. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	40	36	48	51
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	29	9	50	25
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	54	13	22	40
DIVIDEND YIELD
DIVIDEND YIELD	84	21	43	22
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	34	13	39	31

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of LG Chem; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 27 (better than 27% compared with alternatives), LG Chem shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below-average for LG Chem. While Sales Growth ranks at 81, professionals currently expect the company to grow more than 81% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 19, which means that, currently, professionals expect the company to grow its profits less than 81% of its competitors, and Capital Growth has a low rank of 16. Historic stock returns were also below average with a current Stock Returns rank of 17 which means that the stock returns have recently been below 83% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 27, is a hold recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance isn't stellar here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	61	89	90	81
PROFIT GROWTH
PROFIT GROWTH	68	91	56	19
CAPITAL GROWTH
CAPITAL GROWTH	n/a	57	76	16
STOCK RETURNS
STOCK RETURNS	4	9	11	17
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	33	71	61	27

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of LG Chem.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 45 (better than 45% compared with alternatives), the company LG Chem has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of LG Chem is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for LG Chem and the other two below average. Refinancing is at 63, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 63% of its competitors. But Leverage is high with a rank of 32, meaning the company has an above-average debt-to-equity ratio. It has more debt than 68% of its competitors. Liquidity is also on the riskier side with a rank of 49, meaning the company generates less profit to service its debt than 51% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 45 (worse than 55% compared with alternatives), LG Chem has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for LG Chem are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. In the long-term, investors may have a debt challenge with LG Chem and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	30	32	50	32
REFINANCING
REFINANCING	72	19	51	63
LIQUIDITY
LIQUIDITY	24	26	50	49
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	19	14	60	45

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of LG Chem and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	81	89	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	21	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	7	55	^new
MARKET PULSE
MARKET PULSE	n/a	78	69	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	46	86	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for LG Chem.
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