NH Investment & Securities said on the 16th that Samsung Electronics is in a phase where its valuation is normalizing. It maintained a "Buy" recommendation and raised its target price by 11.9% to 94,000 won from the previous level. The previous trading day, Samsung Electronics closed at 76,500 won.
Ryu Young-ho, an analyst at NH Investment & Securities, said, "Recently, the stock has shown a positive trend on expectations that meaningful customers such as Tesla and Apple have been secured in the foundry unit and that, along with improved yields for 1c (6th-generation 10-nanometer class), it will be possible to supply Nvidia with high-bandwidth memory (HBM) in the second half."
He added, "We judge that foundry orders will not have a large short-term impact on earnings, but they will serve as a foundation for restoring competitiveness in the mid to long term," and "various expectations are converging, putting the valuation in a normalization phase."
NH Investment & Securities projected that Samsung Electronics will post positive third-quarter results along with a recovery in the DS unit. It estimated third-quarter operating profit at 9 trillion won, down 1.9% from a year earlier but up 91.9% from the previous quarter.
Ryu said, "The core of the third-quarter improvement is the Device Solutions (DS) unit," adding, "Helped by higher utilization at foundry and System LSI, the deficit is expected to narrow."