Goldman Sachs Reaffirms 'Buy' Rating on Samsung, SK Hynix Amid Share Price Correction

Goldman Sachs has reiterated its 'Buy' rating on semiconductor giants Samsung Electronics and SK Hynix, suggesting that a recent sharp decline in their share prices presents a compelling valuation opportunity for investors.

Market Pressure and Key Concerns

In a research note published Monday, the investment bank addressed the recent stock performance, which saw Samsung Electronics shares fall 23% and SK Hynix shares decline 35% over the past month. Goldman Sachs attributed the sell-off to several investor concerns about the memory chip sector.

Key factors cited by the bank include:

• Weakening expectations for memory chip pricing.
• Higher inventory levels at module makers.
• Increasing memory supply from competitors in China.
• A recent second-quarter operating profit miss by SK Hynix.
• The absence of new shareholder return announcements.

Valuation Perspective

Ad

Following the correction, Goldman highlighted that the companies are trading at low forward multiples. Samsung Electronics is valued at 3.6 times its estimated 2027 price-to-earnings (P/E) ratio and 1.4 times its price-to-book (P/B) ratio, according to the note.

Similarly, SK Hynix now trades at a 3.5 times 2027 P/E ratio and 1.6 times P/B. Goldman Sachs stated these valuations suggest the market does not currently believe in the sustainability of the chipmakers' solid earnings.

Analyst Outlook

The firm's report addressed eight key questions from investors, covering critical topics such as high-bandwidth memory (HBM) pricing, long-term supply agreements, and Chinese DRAM production. Goldman acknowledged that factors outside of industry and company fundamentals may have also contributed to the recent share price weakness.