Morgan Stanley: Samsung Electronics Asia Pacific 1Q26 – Stronger For Longer
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Morgan Stanley highlights Samsung Electronics' record-breaking 1Q26 performance, with revenue reaching KRW 133 trillion, representing 69% year-over-year and 43% sequential growth. This surge was primarily driven by the semiconductor segment, where memory revenue skyrocketed 292% year-over-year. High Bandwidth Memory (HBM4) entered mass production during the quarter, and 2026 HBM bit shipments are projected to triple due to sold-out conditions. Crucially, long-term agreements (LTAs) are expected to constitute a significant portion of total capacity, creating highly binding commitments that will tighten supply considerably by 2027.
In the mobile division, sales achieved mid-single-digit year-over-year growth driven by a favorable flagship mix, while margins remained resilient. Capital expenditure for 2026 is projected between KRW 60 and 70 trillion, primarily directed toward DRAM and foundry expansions. Morgan Stanley maintains an Overweight rating on Samsung Electronics with a target price of KRW 362,000, compared to the current price of KRW 226,000. The valuation remains highly attractive at 4.3 times NTM P/E and 2.3 times P/B, especially given the structurally elevated return on equity. EPS is anticipated to rise materially by 2027, propelled by Agentic AI and HBM repricing, reinforcing the stronger-for-longer narrative.