SK hynix target prices range from 1.48 million to W4.7m as brokerages diverge sharply on outlook

The combined 2027 operating profit of Samsung Electronics and SK hynix is forecast to exceed 900 trillion won ($636 billion) and approach 1,000 trillion won, driven by surging AI investment, a persistent memory chip supply shortage and growing expectations for large-scale shareholder returns. Both companies' shares have rebounded sharply since a late-July selloff, though brokerages remain deeply divided on how far the rally can go.

The gains continued Friday. The Kospi rose 165.06 points, or 2.42 percent, to 6,978.40 as of 9:38 a.m., according to Korea Exchange, briefly climbing to 7,010.86 to reclaim the 7,000 mark. Samsung Electronics traded up 1.31 percent at 271,500 won, while SK hynix surged 6.03 percent to 1.68 million won.

Overnight gains on Wall Street lifted sentiment, with SanDisk jumping 13.67 percent and Micron rising 4.23 percent, boosting the broader semiconductor sector. A softer-than-expected US producer price index for July also eased interest rate concerns, providing additional support for domestic equities. Han Ji-young, a researcher at Kiwoom Securities, said the market would "show strength on the back of relief from the US July PPI and positive news from SanDisk," adding that "as the negative narrative around semiconductor stocks dissipates, the likelihood of further damage to risk appetite across the broader market is low."

Earnings expectations remain elevated. The 2027 operating profit consensus for Samsung Electronics and SK hynix stands at 544.67 trillion won and 391.82 trillion won, respectively, for a combined 936.49 trillion won, according to financial data provider FnGuide. In 2028, the two companies are expected to post operating profits of 543.86 trillion won and 399.13 trillion won, respectively, for a combined 942.99 trillion won.

Both stocks have rebounded after a steep late-July decline. Samsung Electronics fell from 254,500 won on July 13 to 207,000 won on July 30 before recovering to 268,000 won on Thursday. SK hynix dropped from 1.84 million won to 1.32 million won over the same period before bouncing back to 1.61 million won.

Despite the shared upward direction, brokerages are far apart on how much further the stocks can climb. Among firms that issued target prices over the past month — from July 13 to Thursday — Kiwoom Securities set the lowest target for Samsung Electronics at 350,000 won, while Korea Investment & Securities set the highest at 650,000 won. For SK hynix, the range stretched from 1.48 million won at BNK Investment & Securities to 4.7 million won at Korea Investment & Securities, with the highest target roughly 3.2 times the lowest.

The direction of recent target price revisions also varied. Kiwoom Securities cut its Samsung Electronics target from 390,000 won to 350,000 won, and Shinhan Investment lowered its target from 590,000 won to 450,000 won, while Korea Investment & Securities raised its target from 590,000 won to 650,000 won. For SK hynix, Kiwoom Securities trimmed its target from 2.2 million won to 2.1 million won, and Shinhan Investment cut its target sharply from 4.2 million won to 2.7 million won, while Korea Investment & Securities raised its target from 3.8 million won to 4.7 million won. SK Securities and KB Securities held their targets steady at 4 million won and 4.2 million won, respectively.

Bulls point to sustained AI investment and a prolonged memory chip supply shortage. Chae Min-suk, a researcher at Korea Investment & Securities, said the supply shortage "will intensify further as we move into the second half of this year and into next year," adding that "despite rising capital expenditure, the shift toward HBM and leading-edge processes is structurally limiting the pace of supply growth."

Expectations for large-scale shareholder returns are also seen as a catalyst for revaluation. Samsung Electronics plans to announce its next shareholder return policy — including a potential special dividend — during the third quarter, and KB Securities estimates total shareholder returns over the next three years could reach 600 trillion to 700 trillion won. SK hynix is also reviewing additional return measures. Mirae Asset Securities projected that even after setting aside 100 trillion won in cash reserves, the company would have 70 trillion to 80 trillion won available, of which around 40 trillion won could be returned to shareholders. Analysts said that if the cash generated by the memory boom flows into dividends and share buybacks and cancellations, it could serve as a trigger for a broader valuation re-rating.

Bears, by contrast, see the durability of current profit levels as the key uncertainty. Kiwoom Securities forecast that despite HBM growth, DRAM operating profit at Samsung Electronics and SK hynix would fall 6 percent and 10 percent year-on-year, respectively, in 2027. It projected DRAM average selling prices would decline 17 percent from the prior year, with commodity DRAM ASPs falling 33 percent and 35 percent, respectively.

Shinhan Investment also expects the memory boom to continue but struck a cautious note on future earnings and valuations. Kim Hyeong-tae, a senior researcher at Shinhan Investment, said of SK hynix that "the supply-shortage environment will remain unchanged through 2027," but cautioned that "the pace of the share price recovery may be somewhat slower due to a deteriorating supply-demand environment."