Samsung Electronics' (005930.KS) shares are undervalued and could rise sharply this year, said Barron's financial newspaper, despite the Korean electronics giant's management warning first quarter earnings growth was unlikely.
An industry shakeout could benefit Samsung and see it grow its share of global smartphone sales from a third to more than half, the newspaper said in its edition to be published on Monday. Its shares could gain more than 30 percent in a year, it said.
"When Samsung emerges from the smartphone bloodbath of the next several months, it's going to have a stronger competitive position than it had going in," Jefferies analyst Sundeep Bajikar, said in the report.
Samsung shares are trading at a ratio of about 6.5 times 2014 earnings forecasts, compared with an average price to earnings ratio of 14.8 times for the S&P 500 .SPX, the report said, adding Samsung is sitting on a huge cash stockpile.
"The stock's current discount seems too severe. A 30 percent rise from here ... would put it at just over eight times earnings, a more suitable price, especially after factoring in all that cash," Barron's said.
(Reporting by Bill Berkrot; Editing by Sophie Hares)