Samsung Electronics' stock has risen more than 6%. This surge follows a tentative wage agreement reached between management and labor unions, alleviating fears of a total strike and boosting investor sentiment.
According to the Korea Exchange, as of 10:29 a.m. on May 20, Samsung's shares were trading at 293,000 won, up 6.16% from the previous day. During pre-market trading, the stock even touched 300,000 won.
The sharp increase in Samsung's stock price is attributed to the tentative wage agreement reached late on May 21, after final negotiations mediated by Minister of Labor Kim Young-hoon.
Previously, on May 14, Samsung's stock had approached the 300,000 won mark but dropped 6.76% due to prolonged disputes over performance bonuses and macroeconomic uncertainties. Notably, foreign investors sold off 7.8621 trillion won worth of Samsung shares between May 15 and 20.
Han Ji-young, a researcher at Kiwoom Securities, stated, "The news of the tentative agreement in labor negotiations has eased strike risks, creating a positive supply-demand environment, particularly for semiconductor stocks."
Analysts are optimistic about Samsung's performance, raising their target prices based on anticipated improvements in earnings and favorable memory market conditions.
Shinhan Investment Corp. raised its target price by 83.3% to 550,000 won. Analyst Kim Hyung-tae noted, "The expected rise in memory prices, stable earnings visibility from long-term contracts, and expectations for enhanced shareholder returns have all contributed to this outlook, alongside the resolution of labor-related concerns."
Mirae Asset Securities also increased its target price from 400,000 won to 480,000 won. Analyst Kim Young-gun highlighted that the growth rates for server and enterprise solid-state drives (SSDs) in May were 22.3% and 41.5%, respectively, showing additional growth compared to the previous month.
On the same day, Korea Investment & Securities raised its target price to 570,000 won, the highest among brokerages, in light of expectations for a significant increase in memory prices in the second quarter.
Chae Min-sook, a researcher at Korea Investment & Securities, stated, "We have revised our forecast for the average selling price increase of general-purpose DRAM from 30% to 60% for the second quarter, leading us to raise our operating profit estimates for Samsung Electronics to 377 trillion won and 573 trillion won for this year and next year, respectively."
* This article has been translated by AI.
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