SK Hynix ADR surges 26.5% intraday as Barclays sees room to double

Barclays has set a price target for SK Hynix's American depositary receipts more than double their current level, expressing strong optimism about the memory chip sector. The US investment bank expects a memory supply shortage to persist for years, driven by sustained demand for high-bandwidth memory as AI investment expands.

According to financial news outlet Investing.com, Barclays analyst Simon Coles set a $330 price target for SK Hynix ADRs in a report released Tuesday. That is roughly 117 percent above the stock's closing price of $152.10 on Monday.

Barclays forecast that the memory chip supply shortage will deepen further in 2027 and remain largely unresolved through 2028, meaning the sector's upcycle is likely to last longer than the market currently expects.

"Memory semiconductor stocks are deeply undervalued," the report said, adding that current share prices fail to fully reflect the improving industry conditions and earnings outlook.

Bloomberg recently noted that the Kospi's 12-month forward price-to-earnings ratio has fallen to 6.35 times — below the 6.82 times recorded in October 2008 during the global financial crisis. The drag largely reflects the mid-single-digit P/E ratios of Samsung Electronics and SK Hynix, which together account for a large share of the index's market capitalization.

Barclays also expressed limited concern about competition from Chinese memory chipmakers. "Unless global cloud service providers adopt Chinese-made DRAM for data center products, the impact on the global DRAM market structure will remain limited," the report said.

In addition, the bank estimated that SK Hynix will hold cash and cash equivalents exceeding 40 percent of its current market capitalization by end-2027, and forecast that the company will use that position to expand shareholder returns, including through buybacks.

Buoyed by the bullish outlook, SK Hynix ADRs surged 26.5 percent to $192.70 as of 3:51 p.m. Eastern time Wednesday on the New York Stock Exchange, compared with the previous session's close. The rally was driven by expectations for HBM demand tied to growing AI investment and optimism over a broader memory market recovery.