Disclaimer: This article is for informational purposes only and does not constitute financial advice.
📌 Key Research Highlights
- Broker: Eugene Investment & Securities
- Investment Rating: Strong Buy (Maintained)
- Target Price: 560,000 KRW (~$420.11 USD based on 1333 KRW/USD) (Maintained)
- Core Thesis: 3Q26 earnings beat driven by stronger-than-expected memory price hikes; growth trajectory to be sustained by HBM4 expansion and aggressive ASP leadership through 1Q27.
Investment Thesis and Target Price
Eugene Investment & Securities maintains a Strong Buy rating and a Target Price of 560,000 KRW (~$420.11 USD based on 1333 KRW/USD). The analyst views the current phase as a period for raising expectations, as the market focus shifts from simple price momentum to the sustainability of profit levels. The valuation is supported by the company’s ability to maintain the highest Blended ASP within the memory industry through aggressive pricing policies. Future catalysts include the 4Q26 earnings call in January, where the announcement of additional shareholder returns and a new three-year policy are expected to meet market expectations and resolve investor concerns.
Earnings Estimates and Financial Preview
3Q26 Preliminary Results:
- Revenue: 195.0 trillion KRW (~$146.3B USD), +14% QoQ.
- Operating Profit: 107.4 trillion KRW (~$80.6B USD), +20% QoQ, exceeding both the broker’s estimate (103.6 trillion KRW) and market consensus (106.7 trillion KRW).
Divisional Performance (3Q26 Estimates):
- Memory: Operating profit of 110.1 trillion KRW (~$82.6B USD), +20% QoQ. General DRAM and NAND Flash ASPs rose +21% and +22% QoQ, respectively. DRAM Blended ASP increased +20% QoQ.
- Foundry/LSI: Operating loss of 1.5 trillion KRW (~$1.1B USD) due to increased depreciation from the Taylor fab, despite HBM4 Base Die production expansion.
- MX/NW: Operating loss of 2.0 trillion KRW (~$1.5B USD). While sales of the Galaxy Z Fold 8 were strong, profits were hit by a strategy to limit product price hikes to expand market share despite surging memory costs.
- Others: VD/DA recorded a loss of 0.5 trillion KRW (~$375M USD), while SDC and Harman recorded operating profits of 1.0 trillion KRW (~$750M USD) and 0.5 trillion KRW (~$375M USD), respectively.
Future Forecasts:
- Short-term: 4Q26 and 1Q27 operating profits are projected at 118.8 trillion KRW (~$89.1B USD) and 138.6 trillion KRW (~$104B USD), respectively.
- Annual: 2026E and 2027E operating profit estimates have been revised upward to 373.0 trillion KRW (~$280B USD, +752% YoY) and 633.2 trillion KRW (~$475B USD, +70% YoY).
Key Semiconductor Drivers and Catalysts
HBM4 and Memory ASP Momentum:
The primary driver for earnings growth is the expansion of High Bandwidth Memory (HBM) shipments, specifically focusing on HBM4, which saw a +25% QoQ increase in B/G and a +13% QoQ increase in ASP in 3Q26. The analyst highlights 1Q27 as a critical window for further upward revisions of ASP assumptions, as mobile-oriented price hikes and annual HBM contract renewals coincide.
Strategic Outlook:
Samsung Electronics is leading the industry with an aggressive pricing strategy. While the Foundry/LSI and MX/NW divisions currently act as a drag on profitability, the massive growth in Memory—driven by server DRAM and eSSD price increases—is expected to more than offset these losses, ensuring a long-term gradual upward trend in stock price as fundamentals are proven.
🔗 Original Source: View the official filing/article here.