Analysts shared their opinions on Samsung Electronics admitting that earlier forecasts for the S4 model were too optimistic and dont represent sales. Some of them were misled by the huge marketing share the smartphone maker has, impressing marketing strategy and recent problems of main competitors in the industry.
Woori Investment & Securities, one of South Koreas largest security firms was the first to adjust its outlook on Samsung. This triggered a wave of downgrades by JP Morgan, Goldman Sachs and Morgan Stanley. Sales for the S4 models were adjusted down with 30%.
“Id say most forecasters including myself had this conviction that theyll outperform again – because its Samsung,” Byun Hanjoon, an analyst at KB Investment & Securities commented cited by Yahoo Finance. “They had beaten expectations before, which led many to believe they are bound to excel again with the S4.”
Samsung sold 10 million S4 products for the first month which beat estimates and triggered higher forecasts. But trend didnt found support in sales for the next period which left analysts rethink their valuations of the new S4.
“S4 sales are solid. Its just that some analysts had higher expectations and then they lowered them,” J.K. Shin, head of Samsungs mobile devices division, told reporters last week.
It looks as Mr Shin is absolutely right saying that. Over the past month 17 of 43 analyst lowered their expectations on tech giant leading to a sum of 0.6% fall in their average forecast. However, the adjusted forecast would still be a quarterly record.
As high-end products are slowing sales due to low differentiation of products between competitors, Samsung is trying to improve its middle range models. Right now they represent 15% of companys total shipments.
Samsungs stock, which slumped to a six-month low on Thursday, raised 0.9 percent on Friday.
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