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Investing.com - Nomura/Instinet downgraded Samsung Heavy Industries Co Ltd (KS:010140) from Buy to Neutral while raising its price target to KRW22,000 from KRW20,000.
The downgrade comes despite Nomura’s positive view on the company’s fundamentals, with the research firm citing "valuation burden coming from recent stock price increase" as the primary reason for the rating change.
Nomura raised its 2025 and 2026 net profit forecasts for Samsung Heavy Industries by 23.3% and 16.9% respectively, factoring in additional one-off gains from foreign exchange hedging related to a Russia project.
The new price target is based on a higher 12-month forward book value per share of KRW6,124, up from the previous estimate of KRW5,592, with Nomura applying a target price-to-book ratio of 3.64x.
The research firm noted potential benefits for Korean shipyards from further tightening of US regulations on Chinese competitors, while identifying "further delay on LNG vessel tender" as a downside risk for Samsung Heavy Industries.
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