Business · Companies · 1 hr ago
Analysts cut LIG Defense & Aerospace price targets as development costs rise
Two brokerages lowered their price targets for LIG Defense & Aerospace but kept their buy ratings.
They expect the South Korean defence company’s third-quarter operating profit to be below market expectations, with estimates of 800 billion to 900 billion won against a market forecast of 1 trillion won.
LIG Defense & Aerospace makes missile systems, including the Cheongung-II air-defence system, and is working on projects for domestic and overseas customers.
Higher development spending is weighing on profits, as costs for adapting weapons for export are expected to rise in the second half of the year.
One analyst also expects a provision for losses linked to a domestic long-range air-to-air missile development contract.
New contracts in the Middle East and Europe could support growth, particularly for Cheongung-II and the L-SAM long-range air-defence system.
Factory expansions are expected to add capacity over time, while analysts say future share gains depend on those overseas contracts becoming firm.
Daishin Securities and Hyundai Motor Securities cut their price targets for LIG Defense & Aerospace, while keeping their buy ratings.
The analysts said development costs concentrated in the second half could push third-quarter operating profit below market expectations.
Daishin estimated third-quarter operating profit at 80 billion won, while Hyundai Motor Securities forecast 90 billion won.
The analysts also cited expected investment in missile development and a possible provision for losses on a domestic missile project as pressures on profitability.
They pointed to potential Cheongung-II contracts in the Middle East and Europe, as well as expanded production capacity, as possible longer-term growth drivers.
- Who
- Daishin Securities and Hyundai Motor Securities analysts.
- What
- They lowered their price targets for LIG Defense & Aerospace but kept their buy ratings.
- When
- The report was published on October 19, 2026.
- Where
- South Korea; the company’s shares are listed on the KOSPI.
- Why
- Analysts expected development costs to weigh on third-quarter earnings and lower their earnings estimates.
This story does not have two clearly opposing sides.
Maeil Business reported that Daishin Securities and Hyundai Motor Securities had lowered their price targets for LIG Defense & Aerospace.
Daishin estimated operating profit of 80 billion won, while Hyundai Motor Securities forecast 90 billion won.
Daishin expected development costs to be concentrated and a loss provision to be set for a domestic long-range air-to-air missile development project.
The Gimcheon plant was expected to be completed.
Some effects of the Gimcheon plant expansion were expected to begin appearing in results.
- Daishin target
- Lowered from 990,000 won to 830,000 won
- Hyundai Motor Securities target
- Lowered from 1,320,000 won to 925,000 won
- Daishin third-quarter operating profit estimate
- 80 billion won
- Hyundai Motor Securities third-quarter operating profit estimate
- 90 billion won
- Expected 2026 research and development costs
- About 200 billion won
- Gimcheon plant
- Expected completion in early 2027
What people are saying
저평가 상태에 돌입
중동 및 유럽 국가의 천궁-II 계약, 및 L-SAM 수주 현실화에 따라 상승할 것