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Photo = Samsung Electronics |
[Alpha Biz= Kim Sangjin] Ahead of Samsung Electronics' earnings report for the fourth quarter of last year, securities firms have been lowering their target stock prices. The reduction is attributed to the fact that the fourth-quarter results are expected to miss market consensus, and the outlook for the company's performance in 2024 remains pessimistic.
According to industry sources on Sunday, 18 out of 23 reports on Samsung Electronics published over the past month have downgraded the company's target stock price. The remaining five reports maintained the previous target prices, and no reports raised the target price.
As of January 3rd, Samsung's operating profit consensus for Q4 2023 stands at 8.475 trillion KRW. While this marks a nearly threefold increase compared to the same period last year, investors are focusing on the fact that market projections have dropped by over 30% in just six months.
Investor sentiment has worsened further in the past week, with consensus estimates being revised down by more than 7% ahead of the preliminary earnings announcement on January 8th.
KB Securities, which has presented the lowest target price, lowered its forecast to 70,000 KRW, down from 80,000 KRW in October. The firm explained, "We have revised our operating profit estimates for last year and this year downward by 4.8% and 16.5%, respectively. The continued decline in memory chip prices due to sluggish demand for smartphones and PCs, along with expanded production capacity by China's CXMT, is expected to disrupt semiconductor prices. Additionally, the underperformance in foundry utilization and weak system LSI results are likely to persist."
As concerns over Samsung Electronics, the KOSPI's largest player, grow, the overall market sentiment for KOSPI-listed companies has also turned negative. As of January 3rd, the combined operating profit of 110 KOSPI companies with estimates from three or more securities firms stands at 39.653 trillion KRW. Although this is double the operating profit for Q4 2023 (19.794 trillion KRW), when narrowing the comparison to 87 companies with available data, the operating profit has decreased by approximately 16.5% compared to three months ago.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
