[Alpha Biz= Kim Sangjin] KB Securities Lowers Samsung Electronics' Target Price to 70,000 Won Amid Earnings Forecast Reductions

KB Securities downgraded its target price for Samsung Electronics from 80,000 won to 70,000 won, citing downward revisions in its earnings forecasts for 2023 and 2024. The previous day's closing price was 53,600 won.

KB Securities projected Samsung Electronics' operating profit for this year and next year to be 34.1 trillion won and 36.1 trillion won, respectively. These figures represent reductions of 4.6% and 16.5% compared to its previous estimates.

The brokerage firm stated, "Continued declines in general-purpose memory prices due to weak demand for smartphones and PCs, along with the expansion of memory production capacity by China’s CXMT, could disrupt semiconductor prices in the future. Additionally, the speed of market penetration for HBM3E (a type of high-bandwidth memory) is likely to slow due to competitors entering the market earlier."

KB Securities also highlighted ongoing challenges, stating, "The foundry segment's low utilization rates will likely result in continued weak performance for system LSI, and intensified price competition in small- and mid-sized OLEDs will delay improvements in display segment results."

Despite these concerns, KB Securities maintained its "Buy" rating, explaining, "The current stock price reflects these worries and demonstrates resilience due to share buyback programs."

However, the firm predicted that Samsung’s stock would continue to trade within a range for the time being. It emphasized that a stock price rebound would require enhanced competitiveness and improvements in market conditions.

 

 

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