Could Samsung Electronics Hit 500,000 Won and SK hynix 4 Million Won? Semiconductor Target Prices Keep Rising

Despite heightened market volatility, securities firms are sharply raising their price targets for semiconductor stocks. However, share prices are under pressure from factors such as interest rate hike concerns, widening the gap between expectations and reality. Nvidia's earnings announcement, scheduled for the 20th local time, is seen as the main factor that will determine the direction of semiconductor stocks.
According to FnGuide, the average target price for Samsung Electronics stood at 358,333 won as of the 19th. That is up 19.9% from the end of last month, when it was 298,750 won. SK hynix's target price rose 26.8% month on month to 2,205,833 won from 1,738,750 won.
Nomura Securities in Japan sharply raised its target prices for Samsung Electronics and SK hynix to 590,000 won from 340,000 won and 4 million won from 2.34 million won, respectively. Nomura said, "The current 12-month forward price-to-earnings ratio for Samsung Electronics and SK hynix remains at around 6 times," adding, "The market is underestimating the durability of earnings at the two companies, and they should be valued at a level close to Taiwan Semiconductor Manufacturing Company Limited (TSMC), which trades at around 20 times earnings."
Domestic brokerages are also competing to raise their target prices for the two companies. Mirae Asset Securities and EUGENE INVESTMENT & SECURITIES CO., LTD. lifted SK hynix's target price to 3.2 million won. For Mirae Asset, this was a further adjustment just over 10 days after it raised the target from 2 million won to 2.7 million won on the 7th of this month. Kim Young-geon, a researcher at Mirae Asset Securities, said, "We raised our earnings estimates to reflect stronger NAND prices," adding, "Both KIOXIA Corporation and SanDisk Corporation are forecasting operating margins in the 70% range for the second quarter, and SK hynix's NAND business also appears highly likely to reach an operating margin in the 70% range."
EUGENE INVESTMENT & SECURITIES CO., LTD. also raised Samsung Electronics' target price from 360,000 won to 500,000 won. That is the highest target price among domestic brokerages. Son In-jun, a researcher at EUGENE INVESTMENT & SECURITIES CO., LTD., said, "As the memory supercycle is prolonged, operating profit next year is expected to reach 50.4 trillion won," and added, "In the long term, large-scale shareholder returns and expansion of foundry customers based on memory supply capabilities will drive share price gains."
However, semiconductor stocks have recently been volatile. On the 18th local time at the New York Stock Exchange (NYSE), semiconductor shares weakened. Micron fell 5.95% from the previous day to $681.54, while Seagate and SanDisk also dropped sharply by 6.87% and 5.30%, respectively. SanDisk has fallen 22.79% from its peak of $160.
Samsung Electronics and SK hynix also declined that day. Samsung Electronics closed at 275,500 won, down 1.96% from the previous day, while SK hynix fell 5.16% to 1,745,000 won. Compared with its intraday high of 2,021,000 won on the 14th, SK hynix has dropped by more than 15%.
The main drag appears to be growing pressure from interest rate hikes and related concerns. Still, Nvidia's earnings report, due on the 20th local time, is expected to help gauge the direction of semiconductor stocks. Kang Jin-hyuk, a researcher at Shinhan Securities Co., Ltd., said, "As the market digests valuation concerns, we need to watch whether Nvidia's earnings, due to be released early on the 21st Korea time, will become another major turning point."
Jeong Yong-taek, a researcher at IBK Securities, said, "The prevailing view in the securities industry is still that the semiconductor cycle will continue to rise," but added, "Market interest rates in the United States could rise further in the second half. If rates weigh on the economy, the second half of the year could bring a very different environment from the one we are seeing now."
fair@fnnews.com Han Young-joon Reporter