Wolfe Research raised its SK Hynix price target to $250 from $200 and reiterated an ‘Outperform’ rating.
- Wolfe analyst Chris Caso said the firm’s updated models reflect “continued pricing improvement” across the memory sector.
- Wolfe expects memory demand to remain above supply through at least 2028, supporting further pricing strength.
- SK Hynix and Micron could generate enough free cash flow in 2026 and 2027 to repurchase shares equivalent to 32% and 25% of their respective market capitalizations.
SK Hynix’s (SKHY) stock declined in midday trade on Wednesday, while Wolfe Research raised its price target on the memory chipmaker to $250 from $200 and reiterated an ‘Outperform’ rating, pointing to improving memory pricing and the potential for substantial cash returns.
In a note to investors cited by TheFly, Wolfe analyst Chris Caso said the firm updated its memory-sector models to reflect “continued pricing improvement” and remains bullish on the group through 2028.
“While much good news is known, we think the cash flow will be difficult to ignore,” Caso wrote in a research note. He expects SK Hynix and Micron (MU) to generate sufficient free cash flow in 2026 and 2027 to repurchase 32% and 25% of their respective market capitalizations.
Memory Stocks Drop Amid Market Selloff
SKHY stock fell over 3% in intraday trade on Wednesday, while MU stock dropped around 2%, amid broader market weakness as oil prices began climbing again. Wolfe’s price target of $250 implies potential upside of over 30% from SKHY’s current levels.
On Stocktwits, retail sentiment around SKHY trended in ‘neutral’ territory over the past day. Sentiment around Micron trended in ‘bullish’ territory over the past day after optimistic takes from Wall Street and investors looking to its fourth quarter earnings next week.
Wolfe Sees Memory Demand Outpacing Supply
Wolfe expects demand for memory products to remain well above supply at least through 2028, with pricing continuing to rise. The firm cited high-bandwidth memory pricing and accelerated capacity expansions as factors supporting its outlook.
The firm also gave MU stock an ‘Outperform’ rating on the expectation that the strength in the memory market could translate into significant free cash flow over the next several years.
SK Hynix, Micron Could Return Significant Cash
Wolfe’s cash-flow outlook points to potentially large shareholder returns if memory-market conditions remain strong.
While the firm estimated that SK Hynix and Micron could generate enough free cash flow in 2026 and 2027 to repurchase shares equivalent to 32% and 25% of their respective market capitalizations, it said free cash flow could potentially increase further if the current fundamental strength in the memory market extends into 2028.
Wolfe said combined buybacks could exceed 50% of the two companies’ market capitalization if favorable market conditions persist.
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