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pixies
Interesting I have just received a Motely Fool's investment alert on Samsung ...
kinnar
May be samsung is targetting 3rd world countries, and in these countries their ...
Analyst downgrades Samsung on Q3 weakness
Peter Clarke
9/6/2010 11:59 AM EDT
LONDON – Analysts with Nomura in Korea have marked Samsung Electronics Co. Ltd. down on the expectation of a weaker third quarter. Nonetheless the analysts state that Samsung is in better shape than most companies with strong positions in NAND flash, OLED displays and smartphones.
"We are seeing share-price correction owing to weakened demand for key end products (eg, PCs and TVs). Yet, given that the correction in profits should last only two quarters and also be of limited magnitude, we say take any short-term share-price weakness as an opportunity to BUY," the analysts said in a note to clients.
Nomura's target share price for Samsung was reduced to 1,200 won from 1,280 won. Samsung closed on Sept. 6 (Monday) at 780 won.
The analysts revised down their forecast for Samsung's operating profit by 8 percent to 5.26 trillion won (about $4.5 billion) while saying that they expect semiconductors and telecommunications equipment to come in on estimate. Digital media and displays will be the sectors to suffer and fall behind previous estimates.
DRAM will come under pressure through 2Q11, according to Nomura, but although Samsung is the largest DRAM vendor it will not be so harmful to Samsung as it will be to other vendors. Similarly the analysts reckon Samsung is about two years ahead of competitors in OLED display, and this should enable the company to differentiate products such as televisions from their competition. Samsung plans to begin volume production of 5.5G sized panels in 2Q11 and 8G panels sometime in the 2012 financial year, the analysts said.
Similarly the trend towards smartphones should work in Samsung's favor. The Nomura analysts noted the recent successful launch of the Galaxy S smartphone and said it had helped the company make up lost ground on other smartphone vendors. "From here, we expect a wider range of smartphone and tablet PC line-ups, based on Android and Bada OS, working as a strong catalyst of the segment performance," they said in the note.
Related links and articles:
Samsung mulls $25 billion diversification spend
Samsung lengthens lead as DRAM market surges in Q2
Sony develops 'rollable' OLED display
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BalaLak
9/7/2010 12:00 AM EDT
Samsung has been bulldozing its way through a number of market segments. I believe it's at a juncture where it has to make a key decision on which way to go. I am sure Samsung is closely watching Intel's acquisitions of the cable modem business from TI and of McAfee. I feel Samsung will try to strengthen its mobile processors by an acquisition or two so it can enter the tablet/Pad market and an acquisition in the security software area. Let's see where it invests its $25B.
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Rich Krajewski
9/7/2010 12:40 AM EDT
The headline says "Analyst downgrades Samsung on Q3 weakness." But then I read the article and it says "we say take any short-term share-price weakness as an opportunity to BUY." So, they downgraded it to Buy? Then I read that the target price was reduced. Maybe the headline referred to the target price being reduced, not the rating? Then I read about the "Galaxy S." Wow. That's a name for a product, huh? I heard that it is illegal in Korea to laugh at any silly product names they come up with at Samsung. That's true, right? I wonder if Nomura's reduction of their target price for Samsung stock takes into account the mystique and allure of any product with a name as space-helmet-y as "Galaxy S." I can just see Samsung commissioning a CGI-version of Ed Norton to be the spokesperson for Galaxy S. "Galaxy S activated, oh, Captain Video!"
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Rich Krajewski
9/7/2010 12:43 AM EDT
I wonder what the S stands for? Samsung?
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kinnar
9/7/2010 7:19 AM EDT
May be samsung is targetting 3rd world countries, and in these countries their product are being sold a lot.
We can say that it can not stand besides iPhone but Samsung Phones are strongly competing HTC and Nokia in third world countries, and in these countries iPhone or Nokia Samartphones are very costly where samsung is providing cost effective soultions based on the local needs.
Lets see what time shows.
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pixies
9/8/2010 1:48 PM EDT
Interesting I have just received a Motely Fool's investment alert on Samsung saying it is the best investment opportunity in 25 years.
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