Morgan Stanley raises SK hynix target stock price by eight percent

Morgan Stanley raised the target price of SK hynix stocks by eight percent in a rare admittance of its mistake in evaluating a company's stock price on Thursday.

SK hynix [YONHAP]

Morgan Stanley raised the target price of SK hynix stocks by eight percent in a rare admittance of its mistake in evaluating a company's stock price on Thursday.

The U.S. investment company raised SK hynix's target stock price from 120,000 won ($86.41) to 130,000 won.

“Our assessment of hynix stock was wrong in the near term — but not the memory cycle peak,” Morgan Stanley was reported as saying in its Thursday report, according to Bloomberg. Earlier on Thursday, SK hynix announced an earnings surprise for the third quarter.

“We expect 2024 to be another banner year for SK hynix, driven by DRAM [dynamic random-access memory] prices continuing higher for 4Q, albeit at a slower pace, driving exceptional near-term earnings," the investment company said.

It, however, maintained its "underweight" rating for the SK hynix stocks indicating that its analysts believe the stocks will underperform compared to the benchmark index.

Morgan Stanley had issued a dismal report for SK hynix on Sept. 15 titled "Winter Looms," cutting the target stock price of the Nvidia supplier from 260,000 won to 120,000 won, citing an oversupply of high bandwidth memory (HBM) chips. It also downgraded its investment opinion on SK hynix by two grades.

SK hynix on Thursday reported its all-time high quarterly earnings for the July-September period this year riding on the AI boom with its HBM chips which recorded a sell-out throughout next year, according to the company.

Its shares closed at 201,000 won Friday, more than 20 percent up from 162,800 won on Sept. 13 before the Morgan Stanley report.

Meanwhile, Morgan Stanley is facing investigation by Korea's financial watchdog after it was revealed that a large sell-off of SK hynix shares — more than 1 million — occurred at its Seoul branch before the U.S. investment firm issued the "Winter Looms" report.

The Financial Supervisory Service said it will look into whether there had been any insider trading.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]