Barclays initiates coverage on SK hynix ADRs with $330 price target

Barclays has suggested a price target of $330 for SK hynix American depositary receipts (ADRs) in its initial coverage, according to a report by financial media outlet Investing.com on Tuesday.

Barclays analyst Simon Coles set a $330 price target for SK hynix ADRs, which represents an upside of nearly 117 percent from Monday’s closing price of $152.35.

The brokerage expects supply constraints in the memory chip market to deepen through next year and ease only marginally in 2028. It forecasts that the shortage will persist for several years.

The current prices of chip shares are “too cheap,” Coles said.

“[Chinese manufacturer will have] limited impact on the global DRAM market landscape for now unless global CSPs start to use China DRAM for data center products.”

DRAM refers to dynamic random-access memory, while CSP stands for cloud service providers.

The brokerage also estimated that SK hynix will hold cash and cash equivalents worth more than 40 percent of its current market capitalization by the end of next year.

“[There will be] ample opportunity to boost earnings growth through share buybacks,” Coles said.

Renewed optimism over memory chipmakers, fueled by the continued AI investment boom, sent SK hynix ADRs soaring 27.29 percent to close at $193.92 on the New York Stock Exchange on Tuesday.

BY JEONG HYE-JEONG [[email protected]]