Disclaimer: This article is for informational purposes only and does not constitute financial advice.
Investment Thesis and Target Price
Mirae Asset Securities maintains a Buy investment rating for Samsung Electronics but has lowered the Target Price to 370,000 KRW (~$254 USD based on 1455 KRW/USD) from the previous 550,000 KRW (~$378 USD), representing a 33% decrease. The valuation adjustment was primarily driven by a reduction in target multiples following concerns over China’s localization of lithography equipment, although the brokerage believes the impact on earnings estimates through 2028 will be limited. The current valuation is considered absolutely low, with 2026F P/E and P/B multiples at 4.5x and 1.9x, respectively. The brokerage suggests that increasing weight in the stock is valid given the sharp decline in price and the resulting surge in dividend yield, as fundamentals remain intact.
Earnings Estimates and Financial Preview
Samsung Electronics reported 2Q26 preliminary results with revenue of 171.0 trillion KRW (~$117.5B USD, QoQ +28%) and operating profit of 89.4 trillion KRW (~$61.4B USD, QoQ +56%). For the full year 2026F, operating profit is estimated at 397.37 trillion KRW (~$273.1B USD), exceeding the market consensus of 383.0 trillion KRW (~$263.2B USD). Looking further ahead, 2027F operating profit is projected to reach 575.9 trillion KRW (~$395.8B USD). Regarding shareholder returns, if 50% of Free Cash Flow (FCF) is returned between 2024 and 2026, the 2026 dividend yield is expected to be 6.7% to 9.3% for Common Stock and 9.3% to 13.0% for preferred shares.
Key Semiconductor Drivers and Outlook
While memory Average Selling Prices (ASPs) are expected to continue rising into next year, the pace of increase is likely to moderate compared to this year. Key catalysts to monitor during the upcoming conference call include the terms and proportion of Long-Term Agreements (LTAs), the potential for deepening memory supply shortages in 2027 compared to 2026, and the shipment growth rates for High Bandwidth Memory (HBM) for 2026F and 2027F. The brokerage anticipates that 2027 will be the inaugural year for full-scale shareholder returns, as the total FCF for the three years starting in 2027 is conservatively estimated to exceed 800 trillion KRW (~$550B USD), which could significantly raise the base dividend level.
🔗 Original Source: View the official filing/article here.