Samsung Electronics target prices swing from 350,000 to 650,000 won — should investors sell now?

An aerial view of Samsung Electronics' semiconductor campus in Pyeongtaek [Samsung Electronics]

"D-RAM operating profit growth rate to fall sharply — target price 350,000 won ($247)" (Kiwoom Securities)

"Memory chip supply shortage to deepen further — target price 650,000 won" (Korea Investment & Securities)

Kiwoom Securities has cut its target prices for Samsung Electronics and SK hynix for the second consecutive month, citing expectations that D-RAM operating profit growth will slow sharply in 2027.

The brokerage lowered its Samsung Electronics target by 10.25%, from 390,000 won to 350,000 won, and trimmed its SK hynix target by 4.54%, from 2.2 million won to 2.1 million won. Kiwoom Securities had already cut targets for both stocks last month.

The latest reductions reflect concern that growth in D-RAM operating profit is losing momentum.

"This downward revision reflects adjustments to our earnings forecasts and market interest rate assumptions," said Park Yu-ak, a researcher at Kiwoom Securities.

Brokerages are sharply divided on whether Samsung Electronics and SK hynix — widely held as "national stocks" — have further room to rise, leaving retail investors struggling to know whose view to trust. The divergence in target prices appears to hinge on whether semiconductors are still viewed as a cyclical industry or reappraised as a structural growth sector in the AI era.

On Friday, Samsung Electronics closed up 2.48% at 274,500 won, while SK hynix gained 3.26% to finish at 1.645 million won. If Kiwoom Securities' projections prove correct, upside from current levels would be limited.

Korea Investment & Securities, by contrast, raised its Samsung Electronics target from 590,000 won to 650,000 won, pointing to sustained AI investment and a prolonged memory chip supply shortage. "The memory supply shortage will deepen further as we move through the second half of this year and into next year," said Chae Min-suk, a researcher at the firm.

Expectations of large-scale shareholder returns are also cited as a factor that could prompt a rerating of the shares. Samsung Electronics plans to announce its next shareholder return policy — including a special dividend — in the third quarter, and KB Securities estimates the total shareholder return over the next three years could reach 600 trillion to 700 trillion won. SK hynix is also expected to unveil additional shareholder return measures in the third quarter.

Meanwhile, the number of small shareholders in Samsung Electronics — the country's most widely held stock — approached 8 million in the first half of this year, hitting a record high.

According to Samsung Electronics' semiannual report, the company had 7,971,242 small shareholders as of the end of June, up roughly 2.92 million from about 5.05 million a year earlier. Given that South Korea's adult population is approximately 43 million, a simple calculation suggests roughly one in five adults holds Samsung Electronics shares.

SK hynix had 3,461,526 small shareholders, an increase of roughly 2.78 million over the past year. Combined, the two companies now count more than 11 million small shareholders.

park@heraldcorp.com