Citigroup reflected the impact of the won-dollar exchange rate falling (won strengthening) and cut both the earnings outlook and target price for Samsung Electronics(005930) and SK hynix. Still, Citigroup said the boom in the global memory market would continue and kept a "buy" rating on both stocks.
On the 3rd, according to the financial investment industry, Citigroup lowered its third-quarter operating profit outlook and target price for Samsung Electronics.
Citigroup projected Samsung Electronics' operating profit in the third quarter of this year at 104 trillion won. It lowered its expectations by about 10% from the previous forecast (115.5 trillion won). Citigroup noted the recent fall in the exchange rate and the company's promise of massive performance bonuses to employees as grounds for the downward revision.
In addition, with memory prices rising recently while global consumer sentiment weakens, the mobile and consumer electronics businesses of Samsung Electronics are expected to post weak results. The target price for Samsung Electronics was lowered from 450,000 won to 430,000 won.
Citigroup also cut SK hynix's estimated third-quarter operating profit by 3%, from 76.7 trillion won to 74 trillion won. The 2026 full-year operating profit outlook was lowered from 261.1 trillion won to 254.2 trillion won.
The target price for SK hynix was reduced from 3.1 million won to 3 million won. Citigroup analyzed that while the fundamentals of the memory market are solid and SK hynix's share price will rise further, the impact of the falling exchange rate will be reflected in earnings.
Although the target prices of the two companies were lowered, the current share prices were judged to have significant upside potential. Citigroup, even as it trimmed its earnings outlook, expected favorable industry conditions to continue due to long-term supply contracts and a shortage of memory supply.