The supply glut in the memory chip market has severely impacted Samsung's profitability for the past couple of years, however, it appears that things might finally be turning around for the company. The earnings guidance that Samsung released last week seems to suggest so.
No surprise, then, that market analysts are now expecting Samsung's stock to soar as it brings in more revenue and profits due to recovering demand and higher prices for its memory chip products. The stock had taken a beating during the more turbulent market conditions.
A 20% upside expected in the company's stock
Analysts in South Korea are recommending that investors buy Samsung Electronics stock as the company is expected to significantly improve its performance. The signs are already visible. Samsung's Q1 2024 operating profit is officially projected to increase 931% to $4.9 billion, vastly outperforming analysts expectations.
As memory chip prices continue to rise, and Samsung also increases prices, analysts are now expecting that Samsung's earnings will improve further in the second quarter of this year. Samsung will also start supplying its high-bandwidth memory products to AI companies this year, further increasing its revenue.
Analysts are IBK Investment, Mirae Asset Securities, and Hi Investment & Securities all forecast an improved outlook for Samsung. Aside from memory chip price increases, the stars are finally aligning for Samsung as it closes the gap to competitors with HBM3E in the second half, enjoys a greater pricing advantage in the NAND market, and works through its highest-ever order backlog for the foundry business.
All analysts have retained their buy rating for the company's stock with an average target price of 105,000 won or $78, a 20% upside to the current price of 83,600 won or $62.
