[Click e-Stock] "Samsung Electronics: Sufficient Upside Despite Sharp Stock Rally... Target Price Raised to 260,000 Won"

Target Price Raised by 53% from Previous Estimate

On January 28, SK Securities raised its target price for Samsung Electronics from 170,000 won to 260,000 won, stating that there is still sufficient upside despite the sharp rise in the stock price. The brokerage maintained its 'Buy' rating.

Donghee Han, a researcher at SK Securities, said, "We are raising our target price for Samsung Electronics by 53% compared to the previous estimate," adding, "Reflecting a stronger-than-expected memory market, we have revised the 2026 memory price growth rates upward to 111% for DRAM and 87% for NAND." He continued, "We forecast Samsung Electronics' operating profit in 2026 to reach 180 trillion won, a 314% increase from the previous year, and its operating margin to rise by 27 percentage points to 37%, both marking all-time highs for profit and profitability. This exceeds the consensus (the average forecast of securities firms) by 32% for operating profit and by 7 percentage points for operating margin."

The artificial intelligence (AI) cycle is expanding through scale-out and memory tiering, structurally driving overall memory demand, while supply capacity remains structurally constrained. Han explained, "Due to ongoing capital expenditure discipline and spatial limitations, supply shortages are occurring across all product categories, including high-bandwidth memory (HBM) 3E and 4, general-purpose DRAM, and solid-state drives (SSD)." He added, "For buyers, the top priority is to secure stable volumes through long-term supply contracts, while suppliers will begin to pursue profit maximization and stable growth by optimizing the proportion of long-term supply contracts."

He argued that attention should be paid to memory value expansion rather than the traditional cycle's peak-out logic. Han stated, "A sharp upward revision in short-term earnings expectations due to violent memory price increases inevitably implies a slowdown in future growth. While this has always served as justification for peak-out due to momentum slowdown, it is merely cyclical logic. In addition, expanding capital expenditures should not be seen as a sign of future oversupply and peak-out, but rather as an indicator of strong demand confirmed by contracts." He added, "The memory industry is on the verge of value expansion, and Samsung Electronics' performance recovery in the quantitative growth cycle will also attract attention."