Disclaimer: This article is for informational purposes only and does not constitute financial advice.
📌 Key Research Highlights
- Broker: IBK Securities
- Investment Rating: Buy (Maintained)
- Target Price: 350,000 KRW (~$262.37 USD based on 1334 KRW/USD) – Lowered from 460,000 KRW
- Core Thesis: While fundamental memory growth and HBM4 competitiveness are strengthening, the target price is lowered due to shareholder return policies that fail to meet market expectations compared to peers.
Investment Thesis and Target Price
IBK Securities maintains a Buy rating on Samsung Electronics, citing the long-term growth phase of memory demand and the company’s strengthening position within the High Bandwidth Memory (HBM) market. The analyst notes that the current stock price is significantly undervalued relative to earnings performance.
However, the Target Price has been lowered to 350,000 KRW (~$262.37 USD) from the previous 460,000 KRW (~$344.83 USD). While the analyst believes the fair value based on current profitability and market conditions should be 460,000 KRW, a discount is applied because the shareholder return policy is insufficient and lacks preference compared to competitors, which is expected to limit the stock’s upside potential.
Earnings Estimates and Financial Preview
3Q26 Performance Review:
- Revenue: 195.3 trillion KRW (~$146.4B USD), up 13.9% QoQ. Growth was driven by price effects in the DS and MX divisions.
- Operating Profit: 107.4 trillion KRW (~$80.5B USD), up 20.0% QoQ.
- DS Division: Revenue reached 147.1 trillion KRW (~$110.3B USD) with an operating profit of 106.5 trillion KRW (~$79.8B USD). Memory operating profit grew 19.0% QoQ.
4Q26 Forecast:
- Revenue: Estimated at 226.5 trillion KRW (~$170.0B USD), a 16.0% increase QoQ.
- Operating Profit: Estimated at 138.2 trillion KRW (~$103.6B USD), a 28.7% increase QoQ.
- DS Division Outlook: Operating profit is projected to reach 138.5 trillion KRW (~$103.8B USD), driven by a 10-15% increase in both DRAM and NAND prices and a 15%+ increase in volume.
Long-term Projections (2026F-2028F):
- 2026F: Revenue 727.2 trillion KRW (~$545.1B USD) / Operating Profit 392.4 trillion KRW (~$294.2B USD).
- 2027F: Revenue 1,115.7 trillion KRW (~$836.3B USD) / Operating Profit 711.8 trillion KRW (~$533.6B USD).
- 2028F: Revenue 1,382.6 trillion KRW (~$1,036.4B USD) / Operating Profit 939.2 trillion KRW (~$704.1B USD).
Key Semiconductor Drivers and Catalysts
1. HBM4 Leadership: Samsung is expected to significantly improve its position with HBM4. 3Q26 volumes are estimated to be on par with competitors. While HBM has been a drag on profitability through 2026, the analyst expects HBM operating profits to reach DRAM-level margins by 2027.
2. QLC and AI Evolution: QLC (Quad-Level Cell) NAND is emerging as a key beneficiary of AI model evolution (e.g., Meta’s Muse), which requires high virtual memory allocation (100GB per user) on NAND. This is expected to accelerate QLC demand and differentiate Samsung’s NAND Bit Growth from competitors.
3. Long-term Supply Shortage: Memory manufacturers have extended their supply shortage forecasts from 2028 to 2030, suggesting a prolonged period of strong pricing power and demand.
🔗 Original Source: View the official filing/article here.