SEOUL: Samsung Electronics Co Ltd’s shares fell more than 4 per cent to a one-month low on Monday after Morgan Stanley cut its recommendation on the South Korean tech giant, citing concerns that a boom in memory chips is likely to peak soon.
A so-called memory chip “super-cycle” of increased prices due to demand for more firepower in servers and smartphones was the major driver of Samsung’s record third-quarter profit of 14.5 trillion won ($12.91 billion) announced in October, with investors focused on how long it will last.
A Morgan Stanley research report issued on Sunday downgraded its view of Samsung to “equal weight” from “overweight” and trimmed its price target on the stock by 3.4 per cent to 2.8 million won, saying its earnings in the memory segment are not seen growing materially next year.
“We see downside risk as NAND prices have started to reverse in 4Q17. Meanwhile, visibility on DRAM supply-demand dynamics has reduced beyond 1Q18,” the report said. — Reuters
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