[Click eStock] 'R Fear' Shrinks Smartphone Demand... Samsung Electronics' Target Price Revised Downward

[Asia Economy Reporter Ji Yeon-jin] Samsung Electronics' target stock price is being revised downward as concerns about a global economic recession lead to forecasts of decreased demand for semiconductors and smartphones.

NH Investment & Securities lowered the target price from 87,000 KRW to 78,000 KRW in a report published on the 24th, citing "increased risks due to downward revisions of earnings estimates for 2020-230 and interest rate hikes." The buy rating was maintained.

Do Hyun-woo, a researcher at NH Investment & Securities, stated, "Due to macro factors such as global interest rate hikes, the war in Europe, and China's lockdowns, demand for IT sets like smartphones is slowing down," adding, "The previously expected improvement in memory semiconductor supply and demand, anticipated to begin in the second half of the year, is now expected to be delayed until early 2023."

Last month, smartphone sales in China reached 20.6 million units, marking a decline for five consecutive months. Major smartphone manufacturers are currently reducing component purchases to cut inventory due to recent sluggish sales, and Samsung Electronics' smartphone sales in the second quarter are also expected to decrease by 9% compared to the previous quarter, to 68 million units.

While the increase in memory semiconductor supply is positive, there is an analysis that it is not easy to adjust yields due to growing difficulties in developing DRAM processes below 14nm.

On the same day, Daol Investment & Securities lowered Samsung Electronics' target price from 88,000 KRW to 77,000 KRW. However, Kim Yang-jae, a researcher at Daol Investment & Securities, emphasized, "Although a downward earnings trend is expected until the first half of next year, recent stock price adjustments have already reflected much of these concerns," adding, "Samsung Electronics' stock price is approaching a historical low in terms of this year's PBR (price-to-book ratio). Considering its massive net cash and healthy FCF, it is a stable investment target."

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