[Click e-Stock] "Concerns Over Economic Slowdown"... Eugene Lowers Samsung Electronics Target Price by 7%

[Asia Economy Reporter Ji Yeon-jin] Eugene Investment & Securities announced on the 12th that it has lowered the target price of Samsung Electronics by 7%, from the previous 100,000 KRW to 93,000 KRW, citing rising concerns over stagflation (inflation amid economic slowdown) as exchange rates and interest rates become unstable again amid heightened safe-haven asset sentiment due to economic slowdown worries. Considering a preemptive stock price adjustment and relative earnings stability, the investment opinion was maintained as Buy.

Researcher Lee Seung-woo of Eugene Investment & Securities explained, "Concerns over China's economic growth slowdown have increased due to issues such as the Evergrande crisis and power shortages, while U.S. employment data also fell short of market expectations. Inflation, which was expected to be temporary due to rising raw material prices, is likely to persist longer than anticipated, creating a phase of increased uncertainty for the global economy and corporate profits in 2022."

Samsung Electronics' third-quarter sales are projected at 73 trillion KRW, with operating profit at 15.8 trillion KRW, slightly below estimates (sales 74 trillion KRW, operating profit 16 trillion KRW). The fourth quarter is expected to see a slight decline with sales of 72.5 trillion KRW and operating profit of 15 trillion KRW. The researcher stated, "Considering economic slowdown risks in China and the U.S. and the decline in semiconductor prices, earnings are expected to weaken until the first half of next year. However, unless the situation worsens drastically, it is anticipated that profits will enter a growth cycle again from the second half of next year."

The annual earnings forecast for next year has been revised downward to sales of 290 trillion KRW and operating profit of 54 trillion KRW, compared to the previous estimates (sales of 309 trillion KRW and operating profit of 59.8 trillion KRW).

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