[Edaily Reporter Kim Kyung-eun ] On the 12th, Hana Securities lowered its target price for SamsungElectronics(005930) by 16.7%, from 480,000 won to 400,000 won. Although the firm had maintained its target price just two weeks ago after raising its operating profit forecast for next year by more than 20%, it has now lowered its expectations to reflect the decline in valuations among global semiconductor companies. The firm believes that despite improvements in the semiconductor industry and earnings growth, there are limits to the stock’s revaluation.

Hana Securities maintained its “Buy” investment rating on SamsungElectronics today and adjusted the target price to 400,000 won. This comes just 13 days after the firm maintained its target price in a report on the 30th of last month, having raised its 2027 operating profit forecast by 20.1% from 519 trillion won to 624 trillion won.

The direct reason for the target price reduction is the decline in valuations among global semiconductor companies. The firm explained that as stock prices across the semiconductor sector have corrected, it lowered the multiples used to calculate enterprise value. It judged that a decline in valuations across the broader stock market is inevitable as the high-interest-rate environment persists.

Kim Rok-ho, an analyst at Hana Securities, explained, “We lowered the applied multiples because the multiples of global semiconductor companies have come down,” adding, “In an era of high interest rates, a decline in stock market multiples is inevitable.”

The outlook for SamsungElectronics’ earnings remains positive. Hana Securities projected SamsungElectronics’ 2027 revenue at 1,013 trillion won and operating profit at 624 trillion won—representing increases of 40% and 61%, respectively, compared to this year.

In particular, the firm projected that memory semiconductors would drive earnings growth. It estimated that next year’s operating profit for the memory division would reach 627 trillion won, exceeding the company’s total operating profit. This is because losses from the foundry and certain non-memory businesses are expected to partially offset overall profits.

The growth momentum of the High-Bandwidth Memory (HBM) business also drew attention. SamsungElectronics has been actively expanding HBM4 supplies to major clients since the second half of this year. Hana Securities estimated that HBM revenue next year will reach 91 trillion won, approximately seven times higher than this year’s figure. Its share of total DRAM revenue is also projected to expand to 15%.

The expansion of long-term supply contracts was also cited as a factor that could drive a future revaluation of the stock price. SamsungElectronics is increasing the proportion of long-term supply contracts, particularly with server and data center customers. With more than 50% of total production capacity secured through long-term contracts, earnings visibility is expected to improve.

Analyst Kim stated, “Since the stock market seeks to verify the effectiveness of long-term supply contracts, it is expected to monitor whether these contracts remain valid when memory prices become volatile,” adding, “If a reduction in earnings volatility is confirmed, a valuation re-rating is entirely possible.”

The firm also viewed the potential for expanded shareholder returns positively. Hana Securities estimated SamsungElectronics’ shareholder returns for this year at up to 110 trillion won. Of this amount, dividends are expected to total approximately 70 trillion won, while share buybacks and cancellations are projected to reach about 40 trillion won.

As SamsungElectronics’ three-year shareholder return policy for 2024–2026 comes to an end, the company plans to announce a new policy in January of next year. Hana Securities predicted that the current policy—which allocates 50% of free cash flow (FCF) to shareholder returns—could be further strengthened.

Analyst Kim emphasized, “SamsungElectronics is the first semiconductor company to achieve quarterly operating profit exceeding 100 trillion won, and it will remain the undisputed most profitable company in 2027 as well,” adding, “We believe the stock should break out of its current undervalued range.”