'Same-day reports, same stock — but target prices worlds apart': Samsung Electronics splits analyst opinion

Analyst opinion on Samsung Electronics, South Korea's flagship semiconductor stock, has split sharply. While brokerages broadly agree that the company's third-quarter earnings represent a temporary pause, their interpretations diverge dramatically: one firm raised its target price to 630,000 won ($463) — a bold upgrade — while another held firm at 350,000 won.

The gap between the two targets issued on the same day amounts to 280,000 won, a 1.8-fold difference, underscoring just how fiercely the debate over a semiconductor "peak-out" — whether the cycle has already crested — is being contested.

Yuanta Securities Korea and Kiwoom Securities both published research notes on Samsung Electronics on Wednesday. Yuanta raised its target price 19 percent, from 530,000 won to 630,000 won, while Kiwoom kept its target unchanged at 350,000 won. Based on Tuesday's closing price of 276,500 won ($203), the implied upside stands at 128 percent and 27 percent, respectively. Both firms maintain a buy recommendation.

The two brokerages agree that Samsung's third-quarter operating profit will come in around 100 trillion to 107 trillion won, falling slightly short of market expectations. A weaker won-dollar exchange rate and slowing memory chip price gains are seen as the main drags on near-term results.

Where they diverge is in their outlook beyond the third quarter. Yuanta projects next year's operating profit at 590 trillion won, a 65 percent increase from this year's 358 trillion won. Kiwoom, by contrast, forecasts next year's operating profit at 346 trillion won, a 5 percent decline from this year's 365 trillion won. The gap between the two estimates for the same company in the same year reaches 244 trillion won ($179 billion).

Yuanta places greater weight on a prolonged upcycle and substantial free cash flow than on the near-term slowdown in price gains, viewing any share price pullback driven by peak-out fears as a medium-to-long-term buying opportunity.

"The market is worried about a potential peak-out in 2028 due to new capacity additions and noise around HBM, but given that HBM production scale-ups are eating into conventional DRAM capacity and that demand for high-capacity memory is rising with the spread of AI inference, the point at which supply constraints ease is likely to come later than expected," said Baek Gil-hyeon, an analyst at Yuanta Securities Korea.

Yuanta also cited the structural expansion of free cash flow as the upcycle extends, arguing that the shareholder return policy for 2027–2029, due to be announced in January next year, could be strengthened — providing further support for the share price. The 630,000 won target is derived by applying a target price-to-book ratio of 3.5 times to the projected 2027 book value per share of 179,148 won ($132).

Kiwoom, meanwhile, concluded that the price surge cycle for conventional memory chips has run its course.

"Prices for conventional DRAM and NAND, which have driven overall earnings, are expected to rise only about 3 percent and 12 percent quarter-on-quarter, respectively, in the fourth quarter of this year, weighed down by customer price resistance and weak consumer demand," said Park Yu-ak, an analyst at Kiwoom Securities. "On top of that, pricing pressure will intensify amid market share competition with China's CXMT and YMTC."

Park nonetheless recommended a buy from a medium-to-long-term perspective, noting that HBM and foundry operations are poised to expand market share and establish themselves as new growth engines. "The investment thesis needs to shift from 'conventional memory price increases' to 'HBM and foundry market share expansion,'" he said.

Despite the cautious voices reflecting peak-out concerns, the prevailing mood among Yeouido brokerages still leans toward an extended supercycle.

Daishin Securities, which published its own note on Tuesday, kept its target price at 560,000 won and flagged a widening supply-demand gap. "In next year's demand negotiations, many customers are presenting purchase volumes above expectations, raising the likelihood that the intensified buying competition seen in the second half of 2025 will repeat itself," said Ryu Hyeong-geun, an analyst at Daishin Securities. "Samsung Electronics is reducing cycle volatility through a rolling-base approach — renewing contracts annually to secure five years of demand visibility — and discussions on 2031 volumes are believed to be taking shape."

KB Securities also forecast that as Samsung's capacity additions remain concentrated in HBM, conventional DRAM production capacity will continue to shrink, structurally prolonging a supply shortage over the long term.

"Lead times for high-capacity server DDR5 orders have stretched to as long as 52 weeks — more than eight times the normal six weeks — and Samsung's DRAM inventory in September has fallen below 10 days, near a historic low," said Kim Dong-won, an analyst at KB Securities. "Conventional DRAM prices in the third and fourth quarters are expected to post double-digit gains, exceeding market expectations." KB Securities had previously set its target price for Samsung Electronics at 600,000 won ($441).