Tags: 2012 Silver Stocks ,BAGL ,SBUX ,SLE ,THI ,Top Stocks To Buy 2012 ,Top Stocks To Buy For 2012 ,Top Stocks To Buy In 2012 ,Tim Hortons' Dividend Is Safe
Sanford Bernstein’s Mark Newman late last night raised his price target way, way up on the ordinary shares of Samsung Electronics (SSNLF), which he rates Outperform, and raised his EPS estimates on what he calls the company’s “mobile domination.”
Newman now sees the company making 89,032 Korean Wan per share this year, up from a prior 85,358, and 123,785 per share next year, up from 97,072.
Though LCD and DRAM markets are a risk for Samsung, even a bear scenario for both in 2012 would still yield 96,793 Wan per share next year, he thinks, and “this assumes historical low margins of -4% for DRAM and -5% for LCD, which we believe for DRAM will never happen again.” Both products have been declining as a percentage of revenue, he observes.
His main point, though, is that revenue from handset sales will likely double, or just about, by 2015, as the company overtakes Nokia (NOK):
Now the market leader in Smartphones, Samsung has the largest scale advantage, broadest product portfolio and one of the broadest distribution networks (second only to Nokia). This positions Samsung well to ride the wave of smartphone mass adoption through to 2015, driving revenue growth and s! table op erating margins. We project Samsung will overtake Nokia to take the lead in overall handsets during 2012.
Samsung is second only to Apple (AAPL) in profit from mobile devices, he writes. And when adding in the parts of the LCD and DRAM and other businesses that go into mobile products, Newman crowns Samsung the “world’s largest mobile company” by revenue.
“Samsung captures a larger share of the value chain of a mobile phone than any other player, and therefore is much less sensitive to immediate moves in market shares. We believe this means that SEC is the safest bet on the “mobile revolution” story.”
Newman assigns a 10 times P/E multiple to Samsung shares, with the “most appropriate comps” being “today’s leading handset players.”
Hence, he assigns a price target of 1,500,000, up from 1,150,000 previously.
Samsung shares today closed up 7% at 1,074,000.
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