[Edaily Reporter Kim Kyung-eun ] On the 6th, SKSecurities maintained its target price of 610,000 won and “Buy” rating for SamsungElectronics(005930), stating that “the stock is significantly undervalued.” This target price represents a 121% upside potential compared to the closing price of 276,000 won on the 2nd.

Han Dong-hee, an analyst at SKSecurities, stated in a report released that day, “While SamsungElectronics’ projected price-to-earnings ratio (PER) for next year is only 4.2 times, its profit-generating capacity ranks among the very best globally.”

SKSecurities projected SamsungElectronics’ third-quarter operating profit for this year at 106 trillion won. This represents an 18% increase from the previous quarter but is 4.5% lower than the previous forecast of 111 trillion won. This revision reflects a downward adjustment of the won-dollar exchange rate assumption from 1,450 won to 1,400 won and an expansion of the projected loss for the Mobile Experience and Network (MX·NW) division from 500 billion won to 1.4 trillion won.

In contrast to the slump in the smartphone and other device businesses, the firm forecast that the memory market—a key driver of the stock price—would be stronger than expected. It projected that DRAM and NAND prices in the third quarter would rise by 17% and 15%, respectively, compared to the previous quarter. Amid ongoing supply constraints due to inventory shortages and the expansion of High-Bandwidth Memory (HBM) production, HBM shipments are also expected to reach a new quarterly high.

The firm also assessed that the foundry business is seeing improvements in both order intake and utilization rates, driven by demand for artificial intelligence (AI). While the likelihood of returning to profitability in the short term is limited when considering provisions for performance-related expenses, the analysis indicates that the overall financial resilience of the Semiconductor (DS) division is strengthening.

SKSecurities lowered its assumption for next year’s won-dollar exchange rate by 7%, from 1,440 won to 1,340 won, to reflect the strengthening of the Korean won. However, it maintained its 2027 operating profit forecast for SamsungElectronics at 568 trillion won. This is because supply shortages are expected to worsen, particularly for AI memory, and long-term supply agreements (LTAs) are expected to support prices for general-purpose memory. The firm forecasts that memory shipments next year will increase by 22% for DRAM and 16% for NAND, while selling prices are expected to rise by 38% and 28%, respectively. It also predicts that HBM selling prices will rise by 103% next year compared to this year.

One analyst emphasized, “The scenario of falling memory prices and declining profits, which the market fears, will not materialize.” He added, “Considering the high base for memory prices and the pricing applied to LTA volumes, the rate of price increases itself will stabilize,” but noted, “The fact that the company has begun to secure earnings stability, visibility, and sustainability is a far more important value.”

The company’s capacity for shareholder returns was also cited as a factor in the stock’s revaluation. Assuming the policy of returning 50% of free cash flow (FCF) to shareholders remains in place, the funds available for shareholder returns are estimated at 193 trillion won in 2027 and 222 trillion won in 2028. These figures currently represent 11% and 13%, respectively, of the combined market capitalization of common and preferred shares.