Brokerage firms cut target prices for Samsung Electronics and SK hynix again in August: "2027 outlook points to a decline"

[Financial News] KIWOOM Securities lowered its target prices for Samsung Electronics and SK hynix again this month, following cuts made last month. The move reflects expectations that operating profit growth in DRAM will slow sharply in 2027 for both stocks.
According to financial data provider FnGuide on the 15th, among the four brokerages that issued reports on Samsung Electronics and SK hynix this month, only KIWOOM Securities downgraded its target prices.
KIWOOM Securities cut its target price for Samsung Electronics by 10.25%, from 390,000 won to 350,000 won. It also lowered its target for SK hynix by 4.54%, from 2.2 million won to 2.1 million won.
Last month, KIWOOM Securities also reduced its target prices for the two companies. At the time, it lowered Samsung Electronics from 430,000 won to 390,000 won and SK hynix from 2.6 million won to 2.2 million won.
The reason for last month's revisions was a weaker outlook for memory earnings. For Samsung Electronics, concerns over intensifying competition with Chinese memory makers were cited. For SK hynix, the increase in second-quarter prices for commodity DRAM and NAND flash memory fell short of the market average.
The reason for lowering expectations this month is concern over a slowdown in operating profit growth in the DRAM segment. KIWOOM Securities forecast that Samsung Electronics' DRAM operating profit next year will fall 6% year on year to 27.8 trillion won. SK hynix is expected to see a 10% decline to 18 trillion won.
Because both companies already posted a sharp increase in earnings growth this year, next year's growth is likely to narrow. In addition, ChangXin Memory Technologies (CXMT) is expanding its production capacity in DRAM, moving beyond PC products to increase server memory supply.
Still, some analysts expect growth in high-bandwidth memory (HBM) earnings to continue, even as profitability in commodity memory such as DRAM weakens. With AI infrastructure investment still ongoing, demand for HBM, which processes large volumes of data at high speed, is expected to remain strong for the time being.
Park Yoo-ak, a researcher at KIWOOM Securities, said, "HBM shipments from Samsung Electronics and SK hynix are expected to rise 109% and 46%, respectively, from a year earlier." He added, "In particular, Samsung Electronics is expected to reclaim the industry's top position in HBM earnings, driven by a higher market share and surging prices."
He added, "Share prices have already fallen as they reflected numerous concerns, but a rebound is expected on the back of HBM earnings growth." He noted that "this target price cut reflects revisions to earnings estimates and market interest rates."

[email protected] Lim Sang-hyeok Reporter