J.P. Morgan: Samsung Electronics — Strong 1Q26 Results, 2027 Earnings Visibility Is the Next Key Catalyst
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J.P. Morgan maintains an Overweight rating on Samsung Electronics (005930.KS) with a target price of KRW 300,000. The company's preliminary 1Q26 results significantly exceeded expectations, with revenue at KRW 133 trillion and operating profit at KRW 57.2 trillion, surpassing estimates by 11% and 29%, respectively. This outperformance was primarily driven by a 75–85% quarter-over-quarter increase in blended DRAM and NAND average selling prices (ASP), well above the forecasted 60–65%, reflecting intensifying memory shortages and improved product mix toward server-grade memory. Bit shipment growth for DRAM and NAND was limited to low single digits due to cleanroom constraints.
Despite near-term price volatility, J.P. Morgan expects the memory upcycle to extend. Visibility into 2027 earnings is identified as the next critical catalyst. Investors have shifted focus toward earnings sustainability, questioning whether memory pricing has decoupled from cloud service provider (CSP) capital expenditures and whether spot prices have peaked.
Looking forward, the firm projects over 30% sequential ASP growth in 2Q26 as supply fulfillment remains around 65%. Supply tightness is expected to persist through the first half of 2028. While second-half price gains may narrow, improving product mix and volume growth should sustain pricing momentum. The target price is based on 2.2x 2026–2027 P/B, above the cyclical peak of 1.9x. Full 1Q26 earnings are scheduled for release on April 30.