KB Securities said on the 25th that Samsung Electronics is expected to post its largest-ever quarterly operating profit in the fourth quarter. It maintained a "Buy" investment rating and raised the target price to 160,000 won from 150,000 won. Samsung Electronics' previous day's closing price was 96,700 won.
KB Securities explained that it raised its target price for Samsung Electronics and named it the top pick in semiconductors because ▲ fourth-quarter operating profit is expected to approach 20 trillion won, pointing to a record-high quarterly operating profit, and ▲ the likelihood that HBM4 (6th-generation HBM) will pass quality certification early within the year is rising sharply.
In particular, KB Securities revised up Samsung Electronics' operating profit for this year and next by 8% and 18%, respectively. Research Center Head Kim Dong-Won of KB Securities said, "In 2026, Samsung Electronics' operating profit and net profit are expected to reach 97 trillion won and 88 trillion won, respectively, each doubling from the previous year, so an earnings surprise is anticipated."
For Samsung Electronics' fourth-quarter results, it projected sales of 91 trillion won and operating profit of 19 trillion won. These figures are up 20% and 192% from a year earlier, respectively. Fourth-quarter operating profit is expected to triple from the previous year, an earnings surprise that exceeds the consensus (market average estimate) operating profit of 14 trillion won by 33%.
Kim particularly expected the semiconductor (DS) division's fourth-quarter operating profit to come in at 15.1 trillion won, five times higher than a year earlier.
He explained, "This is because DRAM prices are rising 35% in the fourth quarter, with the DRAM operating margin projected at 52.9%, and profitability in NAND is expected to improve significantly as shipments of high-capacity eSSD increase."
Meanwhile, with the Democratic Party of Korea set to introduce a third amendment to the Commercial Act that strengthens treasury stock rules, it analyzed that the likelihood of additional cancellation of Samsung Electronics' treasury shares has also increased.
Kim explained, "Of the 10 trillion won in treasury shares recently purchased by Samsung Electronics, excluding the 3 trillion won canceled and 1.6 trillion won for employee compensation, the remaining 5.4 trillion won is likely to be additionally canceled once the third Commercial Act amendment is processed, bringing the total cancellation of treasury shares to 8.4 trillion won."
It also expected that, with an earnings surprise in 2026 driving a surge in free cash flow and considering the 90 trillion won in net cash already held, the likelihood of additional treasury share repurchases and cancellations next year and an upward revision to the three-year shareholder return policy will increase.
Kim said, "Improvement in the medium- to long-term return on equity (ROE) is also expected," adding, "Samsung Electronics is projected to be the ultimate winner of the semiconductor upcycle."