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Investing.com - JPMorgan raised its price target on Samsung Electro-Mechanics Co Ltd. (KS:009150) to KRW230,000 from KRW165,000 on Tuesday, while maintaining an Overweight rating on the stock.
The price target increase follows a 35% rally in Samsung Electro-Mechanics shares over the past three months, outperforming both the broader Kospi index’s 14% gain and peers in the MLCC (multilayer ceramic capacitor) and substrate sectors.
JPMorgan cited rising investor expectations for Samsung’s MLCC growth opportunity in the artificial intelligence server segment, where AI server rack MLCC content is 8-10 times higher than in general-purpose servers.
The investment bank estimates that while AI server shipment volumes remain small, they represent a mid-single-digit percentage of Samsung’s MLCC sales with higher profit contribution, making design wins and customer development important factors to monitor.
JPMorgan also highlighted long-term growth drivers including Robotics AI development, with humanoid demand expected to grow to approximately 5% of global MLCC units by 2030, while noting that Samsung’s capital allocation plan updates could impact the stock as return on equity has declined since the company reached a net cash position in 2021.
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