"Samsung to 260,000 won, SK hynix to 1.35 million won" — Goldman Sachs raises targets again despite KOSPI bubble concerns

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[Financial News] Global investment bank Goldman Sachs Group has raised its target prices for Samsung Electronics and SK hynix in tandem. The bank expects earnings to surge on the back of rising prices for High Bandwidth Memory (HBM) and general-purpose memory semiconductors.
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On the 11th (local time), Goldman Sachs Group sharply lifted its target price for Samsung Electronics from 205,000 won to 260,000 won. It also raised this year’s operating profit forecast from 18.1 trillion won to 23.9 trillion won, and next year’s forecast from 17.0 trillion won to 23.1 trillion won.
After revising up its price outlook for general-purpose Dynamic Random Access Memory (DRAM) and NAND flash memory, Goldman Sachs Group also upgraded its earnings forecasts. The bank explained, "Initial negotiations for supply volumes for the second quarter of 2026 are starting at levels higher than we had expected a few months ago."
It assessed that even though market demand for PCs and smartphones is not particularly strong, supply remains tight. Demand from AI servers is absorbing a significant portion of available capacity, according to the analysis.
Goldman Sachs Group also projected that SK hynix will experience the strongest memory market upcycle in recent years. Reflecting this view, it raised the company’s target price from 1.2 million won to 1.35 million won, lifted this year’s operating profit forecast from 16.9 trillion won to 20.2 trillion won, and increased next year’s estimate from 15.4 trillion won to 19.4 trillion won.
These revisions are based on expectations that SK hynix will achieve operating profit margins in the high-70% range in DRAM and the high-40% range in NAND flash memory this year. The bank also projected that, leveraging its leading position in the AI memory market, the company could post a return on equity (ROE) exceeding 80%.
Goldman Sachs Group viewed positively the company’s share buybacks, dividend increases, and its potential consideration of a New York Stock Exchange (NYSE) listing. Despite the improved outlook, it added that the stock still appears undervalued, trading at around 4.5 times next year’s expected earnings on a price-earnings ratio (PER) basis and at about 1.7 times on a price-to-book ratio (P/B ratio) basis. Considering the anticipated increase in future memory demand, the current valuation was described as attractive.
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Meanwhile, equity strategists at BofA recently characterized the moves in the Korean stock market as a "classic bubble pattern."
According to MarketWatch on the 11th (local time), BofA’s equity strategists pointed to the Korea Composite Stock Price Index (KOSPI) having plunged 12% and then rebounded 10% in short order. They explained that this kind of movement resembles the extreme market instability seen during the 1997 Asian financial crisis, the dot-com bubble, and the 2008 Global Financial Crisis (GFC).
\r\nBofA uses its own metric, the Bubble Risk Indicator (BRI), which compresses factors such as asset returns, volatility, momentum, and vulnerability into a single value between 0 and 1. The closer the reading is to 1, the more it signals extreme bubble-like price swings. The strategists said the current BRI reading for the KOSPI is close to 1, indicating that the index is in a bubble-risk zone.
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bng@fnnews.com Kim Hee-sun Reporter