Analysts remain upbeat about Samsung Electronics

[Photo by Lee Seung-hwan]

Analysts remained optimistic about Samsung Electronics Co. and projected that the company will maintain its momentum by closing the gap with competitors in high-bandwidth memory (HBM) after a strong first quarter in 2024.

IBK Investment & Securities Co. maintained its “buy” stance on Samsung Electronics on Monday, raising its target price to 110,000 won ($81.23) from 90,000 won.

“Semiconductors are experiencing a price recovery and improved profitability, driving expectations for further quarterly improvement,” IBK Investment & Securities analyst Kim Woon-ho said, citing progress in the HBM sector and potential entry into the high-end market as key factors behind the optimism. Kim also noted the continued upward trend in NAND prices and expects the reversal of inventory valuation losses by the first half of 2024.

Mirae Asset Securities Co. similarly maintained a “buy” stance with a target price of 105,000 won, interpreting Samsung Electronics‘ first-quarter performance as a transition into a growth phase that stretches beyond a mere recovery. Analyst Kim Young-gun attributed the robust performance primarily to memory price hikes, highlighting a 22 percent increase in average selling prices (ASPs) for DRAM and a 25 percent rise for NAND, alongside improved profitability due to the reversal of inventory asset valuation losses.

Kim anticipated Samsung narrowing the gap with competitors in the HBM3E sector by the second half of 2024, while also foreseeing cost competitiveness amid NAND market improvements and a potential turnaround to profit in the foundry business.

Analyst Song Myeong-sup predicted that ASP increases will enhance the memory semiconductor sector’s performance, which is expected to counterbalance sluggishness in the mobile and network sectors. Song also highlighted the prospect of HBM‘s supply to NVIDIA Corp. starting in the second quarter of the year, emphasizing the importance of the completion of the 12-stack HBM3E certification for the chipmaker’s near-term stock price.

Hi Investment & Securities upheld a “buy” rating with a target price of 99,000 won for Samsung Electronics.