Credit Suise raises its estimates and maintains its Outperform rating with a W780,000 price target. FY08 and FY09 earnings are up 21% and 15% respectively.
Q1 results beat Street consensus “in large scale due to a broad margin expansion in all divisions (Semi at 4% vs. 2% est, telecom at 17% vs. 14% est, and LCD at 23.3% vs. 21.5% est. Guidance was conservative, however, prompting caution from CS:
Samsung expects DRAM prices to fall in 2H. Samsung maintains handset volume/margin guidance and warned of a potential slowdown in TV sales with plans to cut pricing again in 2H. Samsung raised capex plan in memory and LCD with upgrade in its DRAM bit growth over 100%.
We maintain a positive view on Samsung as it gains share with lower cost, better technology and investment. Although it is buying the share, Samsung should be one of the few who can do so. However, in a short term, we expect muted performance on the stock, with uncertain macro and delayed recovery in DRAM.
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