A Pair Trade Between LG Electronics and LG Display
In this insight, we discuss a pair trade between LG Electronics (066570 KS) (long) and LG Display (034220 KS) (short).
LG Display is likely to face greater margin pressures than LG Electronics this year, which could lead a bigger consensus estimates downward revisions for LG Display than LG Electronics.
Both LG Electronics and LG Display are trading at 0.6x P/B multiples. Given LG Electronics' much higher ROE vs LG Display, LG Electronics should be trading at higher valuation multiples.
Major products of LG Display (Source: LG Display)
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