Mirae Asset Securities lowered Samsung Electronics' target price to 370,000 won on the 29th following the stock's recent decline. Samsung Electronics closed at 220,000 won on the 28th, down 13.39% from the previous trading day. Analyst Kim Young-gun attributed the downgrade to the stock's continued fall, though he maintained a buy rating and stated the current decline is excessive. The brokerage noted Samsung's 2026 estimated PER and PBR stand at 4.5x and 1.9x respectively, indicating significant undervaluation. Samsung Electronics is scheduled to announce confirmed Q2 results on the 30th, with preliminary figures showing revenue of 171 trillion won and operating profit of 89.4 trillion won.
Mirae Asset Securities Cites Excessive Stock Decline as Downgrade Reason
Mirae Asset Securities stated the recent stock price decline is excessive. Kim Young-gun noted the stock adjustment due to downward NAND contract price forecasts appeared complete, but was immediately followed by issues regarding China's domestic lithography equipment development. He assessed the China lithography equipment issue has limited potential to affect Samsung Electronics' earnings estimates through 2028.
The analyst pointed out the industry-wide stock decline following this issue appears excessive, but acknowledged the target price adjustment is unavoidable. He stated Samsung's 2026 estimated PER and PBR are now 4.5x and 1.9x respectively, representing absolute low valuations.
Samsung Electronics Reports Q2 Preliminary Results Ahead of Earnings Call
Samsung Electronics' Q2 preliminary results showed revenue of 171 trillion won, up 129.31% year-over-year, and operating profit of 89.4 trillion won, up 1810.26%. The company is scheduled to announce confirmed results on the 30th.
Kim Young-gun stated key points to watch in the conference call include LTA (long-term supply agreement) contract terms and proportion, whether memory supply shortage will intensify in 2027, expected growth rates for HBM shipments in 2026 and 2027, and whether the board will resolve to buy back treasury shares.
The analyst noted memory supply prices will continue rising in 2027, but the magnitude of earnings growth will inevitably decrease due to base effects. He stated the company now needs to connect heightened profitability to shareholder value, and if shareholder return implementation and new vision presentation occur during the gap period before growth sustainability is confirmed numerically, the company's vision and investor expectations will align.
Analyst Highlights Shareholder Return Potential Based on Free Cash Flow
Mirae Asset Securities projected if Samsung Electronics implements 50% of its 2024-2026 free cash flow (FCF) as shareholder returns, the 2026 dividend yield would reach 6.7%-9.3% for common shares and 9.3%-13% for preferred shares.
Kim Young-gun noted the company purchased 18 trillion won in treasury shares in Q1 for employee compensation purposes, and additional purchases are unavoidable considering performance bonus scale. He stated the current stock price is approaching the Q1 purchase price range of 183,000-196,000 won.
Based on past cases, he expects shareholder returns to be implemented starting in 2027. He noted Samsung Electronics has set the basic dividend amount at 50% of 60 trillion won FCF every three years over the past nine years, distributing approximately 10 trillion won annually. However, he projected the three-year FCF total from 2027 is estimated at over 800 trillion won even conservatively, making a significant increase in the basic dividend level highly likely.
The analyst stated while the stock price has fallen sharply, fundamentals remain valid, making portfolio weight expansion effective. He noted the stock has dropped over 50% from its peak, but strength has not been damaged, and the sharply increased dividend yield makes weight expansion valid at current price levels.
FAQ
What target price did Mirae Asset Securities set for Samsung Electronics?
Mirae Asset Securities lowered Samsung Electronics' target price to 370,000 won on the 29th. Analyst Kim Young-gun stated the adjustment was unavoidable due to the stock's continued decline, though he maintained a buy rating and assessed the current decline as excessive.
What were Samsung Electronics' Q2 preliminary results?
Samsung Electronics' Q2 preliminary results showed revenue of 171 trillion won, up 129.31% year-over-year, and operating profit of 89.4 trillion won, up 1810.26% year-over-year. The company is scheduled to announce confirmed results on the 30th.
