Can it still rise by 90%? SK Securities raises its target prices for Samsung and SK hynix: the memory price outlook is just beginning

Korean SK Securities released a research report 7 days ago, raising the target price for Samsung Electronics to 500k won and for SK Hynix to 3M won, emphasizing that although both stocks have recently risen significantly, based on the price-to-earnings (P/E) ratio, their valuations are still in the lower range. The analyst bluntly said that the re-rating cycle for memory semiconductors has just begun; with the AI-driven demand structure transformation, the investment logic for the memory industry has long been different.

(Break the cycle-myth! One formula to break down the HBM demand structure: Why will memory keep rising?)

SK Securities: Samsung and SK Hynix are projected to see year-on-year business profit growth of up to 18% in 2027

Seoul Economic Daily reported that this time SK Securities’ target price increase is essentially bringing the previously lowered P/E multiple back to its original level, which was reduced due to economic concerns triggered by the Iran-Iraq war between the U.S. and Iran. Samsung Electronics and SK Hynix are respectively assigned P/E multiples of 13x and 10x, corresponding to the high-range levels since 2025.

On profit forecasts, analysts also raised Samsung Electronics’ 2026 operating profit by 3% to 33.8 trillion won, while SK Hynix was raised by 4% to 26.2 trillion won; the 2027 forecast was raised even more. Samsung Electronics is projected to grow 18% year-on-year to 49.4 trillion won, and SK Hynix is projected to grow 15% year-on-year to 37.6 trillion won.

The report emphasized that the core logic behind the recent rally in memory stocks is not simply due to supply-demand imbalance, but because the market is gradually incorporating the idea that “memory earnings structures are facing a re-rating in the AI era” into pricing:

In the past, memory demand was highly dependent on equipment replacement cycles and closely linked to the macroeconomy. Now, with the massive demand for AI inference computing, memory has been upgraded into a key component that directly determines AI performance and cost efficiency, significantly elevating the industry’s status.

Long-term supply contracts rise, demand cycles become steadier

The shift in the demand structure is also directly reflected in the form of supply contracts. SK Securities said that even amid the surge in memory prices, tech giants are actively pushing negotiations for three- to five-year long-term supply contracts, showing that downstream customers’ attention to the stability of memory supply has risen dramatically. These long-term contracts enable memory makers to differentiate their deployments based on customers, the market, and conditions, effectively reducing the severe cyclical volatility that was common in the past, and are expected to significantly improve profit figures.

SK Hynix is the best example of this effect. From Q4 2024 to Q1 2025, despite declines in general DRAM spot prices, SK Hynix’s DRAM profits remained solid—an ideal case demonstrating the impact of long-term contracts. SK Securities predicts that the memory demand cycle will gradually shift to a new pattern of “longer cycles and smaller volatility.”

Analyst: The P/E ratio is too low; multiple catalysts for 2027 are building up

Although the re-rating logic is gradually gaining market recognition, SK Securities believes the current valuation level remains too low. The analyst said that even after this round of share price gains, the 12-month forward P/E ratio for Samsung Electronics and SK Hynix is still only 6x and 5.2x, respectively. Compared with their top-tier profit generation capabilities and business stability among global AI theme stocks, there is clearly valuation discount room: “Considering that the buyer structure for Korean memory continues to expand, the emergence of the appeal of low valuation is still at a very early stage.”

(Share price skyrocketed by more than 41 times within a year! Why can SanDisk stand out among many AI theme stocks?)

Looking ahead, SK Securities listed several catalysts that will drive continued upward revisions to earnings per share (EPS) and support the continuation of the stock’s valuation re-rating:

As memory prices remain strong in the second quarter, the expectation that product prices for all high-bandwidth memory (HBM) will be raised next year, shareholder return rationales strengthened through the broad adoption of long-term supply contracts, and continued supply shortages next year will lead to an increase in the 12-month forward earnings per share (EPS) and the re-rating (re-rating) process.

On the same day, Mirae Asset Securities also followed suit by raising its target price for Samsung Electronics by 25% to 400k won, and said it has removed the previously applied valuation discount factor. The reason is that the investor base structure has changed, indicating that institutional and professional investors’ views on the memory sector are now converging toward a more bullish stance.

Can this article still rise by 90%? SK Securities raises target prices for Samsung and SK Hynix: The memory re-rating cycle has just begun. The earliest appearance is on the Chain News ABMedia.