JPMorgan Deems Market Panic Over for SK Hynix
SK Hynix's stock price plummeted by 15% last week amidst market panic, driven by negative news that included NVIDIA reducing its HBM chip procurement volume and uncertainty surrounding shareholder returns. However, analysts at JPMorgan have debunked these rumors, stating that 'the worst is over' for the company.
JPMorgan has maintained its Overweight rating on SK Hynix with a target price of KRW 2.75 million (for June 2027), implying nearly 94% upside from last week's closing price. The report identifies three key catalysts over the next one to two months: an update on the shareholder return plan, updated HBM contract pricing, and an update on the U.S. subsidiary's IPO plan.
The company has disclosed that it is actively evaluating additional shareholder return measures to enhance shareholder value and expects to finalize and announce the relevant plan by the end of Q3. This timeline represents a clear acceleration compared to management's previous guidance during the Q2 earnings call, which indicated a decision would be made 'by year-end'. JPMorgan forecasts that SK Hynix will generate unprecedented levels of free cash flow over the next three years, estimating cumulative free cash flow exceeding KRW 800 trillion.