Korea Investment lowers price target for Samsung Electro-Mechanics
Sung-Mi Shim
4 HOURS AGO
Korea Investment & Securities lowered the target price of Samsung Electro-Mechanics by 14.3% on Sunday, citing weaker-than-expected third-quarter results and continued softness in IT demand.
In a note to clients, analyst Park Sang-hyun forecasted that the company's third-quarter operating profit would come in at 225.2 billion won ($169 million), missing the market consensus by 9.1%.
"IT demand remains sluggish, and the exchange rate environment is unfavorable," Park wrote, noting that the current market upturn pales compared to the previous boom driven by 5G smartphones and electric vehicles.
Park highlighted servers as a key area of interest but pointed out that revenue from server-related sales in Samsung Electro-Mechanics' multi-layer ceramic capacitor (MLCC) division remains limited, accounting for only 4.9% of total sales.
Although server-related sales have doubled year-on-year, their overall contribution remains modest.
Despite lowering the target price to 197,000 won from 230,000 won, Korea Investment & Securities maintained its Buy rating on Samsung Electro-Mechanics