'Samsung Electronics' Target Price Trapped in Discrepancy Rate Pitfall

Raised Target Price to 120,000 Won
But Stock Slipped to Early 80,000 Won Range
Why Target Price Remains Unchanged Despite Recent Positive Outlooks

[Asia Economy Reporter Hwang Junho] At the beginning of the year, the securities industry raised Samsung Electronics' target stock price to 120,000 KRW, but they fell into the divergence rate trap. In January, while aiming for the "100,000 Electronics," the target price was raised, but the actual stock price slipped to the 80,000 KRW range. Since then, despite positive outlooks pouring out through recent shareholder meetings, the target price has not been adjusted. This is because when the stock price fell, the target price was not touched, leaving nearly 50% gap to the target.

Samsung Electronics' Target Price Trapped in Divergence Rate

According to financial information provider FnGuide on the 30th, the divergence rate between the 12 Samsung Electronics stock reports published after the shareholder meeting on the 17th and the actual Samsung Electronics stock price ranged from 16.42% to 47.05%.

Research centers of securities firms released 2 to 3 reports per firm during January, raising Samsung Electronics' target price significantly, but the actual stock price moved in the opposite direction.

At the beginning of the year, the securities industry dreamed of "100,000 Electronics." On January 4, when the first trading day of the year started, Kiwoom Securities raised the target price to 100,000 KRW. At that time, Samsung Electronics' closing price was 83,000 KRW. Subsequently, by January 11, Samsung Electronics' stock price exceeded 90,000 KRW (closing price 91,000 KRW), and the securities industry's average target price rose to around 100,000 KRW. Some securities firms even projected as high as 120,000 KRW (Korea Investment & Securities, Shinhan Financial Investment).

Contrary to this optimistic sentiment, the actual stock price moved in the opposite direction. Samsung Electronics' stock price fell to the 80,000 KRW range after January 12, closing at 90,600 KRW. From then on, Samsung Electronics' stock price failed to gain upward momentum due to both internal and external factors. Externally, the rise in U.S. market interest rates and favorable inflation expectations weakened investment sentiment in the stock market, trapping the KOSPI index in a box range of 2,900 to 3,000, which also affected Samsung Electronics' stock price as the market leader. Internally, a cold wave in Austin, Texas, U.S., caused a power outage, halting operations at the semiconductor plant located there. Although the plant has recently resumed operations, the aftereffects are expected to impact the second quarter as well. As of the previous day's closing price, Samsung Electronics' stock price was 81,600 KRW per share.

Will the Target Price Find Rationality?

As the divergence rate widened, securities firms have been unable to raise target prices despite positive outlooks confirmed through shareholder meetings. Most reports presented positive forecasts citing improvements in uncertainties regarding the U.S. semiconductor plant operations, increased smartphone sales, first-quarter earnings exceeding market expectations, and increased semiconductor demand in the second half of the year. They also predicted that DRAM product prices would rise from the second quarter, and NAND flash price rebounds would be brought forward from the second half to the second quarter. Only Hanwha Investment & Securities raised the target price significantly from 92,000 KRW to 105,000 KRW, failing to push the price above 100,000 KRW.

A securities firm official said, "Samsung Electronics' earnings outlook exceeds market expectations, and since the target price is a future forecast, it is necessary to consider a longer time frame." Hwang Sewoon, a research fellow at the Capital Market Institute, advised, "Since the target price is the opinion of securities firms or their affiliated researchers, there will always be a divergence from the actual stock price. However, if the divergence rate widens significantly, it is necessary to reconsider and revise opinions to find rationality."

This content was produced with the assistance of AI translation services.