Bank of America: U.S. Memory Stock Valuations Have Already Shown Cyclical Bottom Characteristics; Market Worries Are Overblown

According to Cailian Press, a Bank of America research report states that after approximately three and a half months of a severe correction, the valuation multiples for Samsung Electronics and SK Hynix have essentially bottomed out, with both companies' stock prices falling more than 50% from their June highs. Calculated based on the market's consensus earnings expectations for 2027 to 2028, Samsung's P/E ratio is approximately 2.8x to 3.0x, while SK Hynix's is around 2.3x to 2.7x, and their P/B ratios derived from 2028 expected book value per share have also declined to 0.9x.

Bank of America believes that market concerns regarding a shift from an AI storage boom to a downturn are excessive, and current operating conditions do not align with typical cyclical trough characteristics. The bank forecasts that the average selling prices of memory chips, industry revenue, and profit margins will maintain "super cycle" levels throughout 2027 and 2028. Even if EPS experiences single-digit year-over-year declines in 2028, the absolute levels of revenue, operating profit, and EPS will remain close to historical records and the 2027 peaks.