Citi maintains its "Buy" rating on SK Hynix, with a target price of 3.1 million Korean won.

Citigroup maintains a "Buy" rating on SK Hynix, setting a target price of 3.1 million South Korean won. The U.S. bank stated that the chipmaker’s enhanced shareholder return plan reflects management’s confidence in medium- and long-term growth, and is expected to provide substantial downside support for its share price. SK Hynix plans to implement a 40 trillion won (approximately $287.7 billion) share repurchase program, covering 24.07 million shares, accounting for about 3.3% of its outstanding capital stock, with 100% of the repurchased shares to be canceled. The program is scheduled to run from August 20 to November 19, and the cancellation will be completed within 1 to 2 weeks after its conclusion. Additionally, the company has adjusted its shareholder return criteria for 2025 to 2027 from the previous "within 50% of cumulative free cash flow (FCF) over three years" to "more than 50%". It also clarified that FCF is calculated as cash flow from operating activities minus capital expenditures, with merger and acquisition (M&A) expenses not deducted from FCF. Citigroup noted that SK Hynix plans to disclose the specific scale and method of its further shareholder return program when announcing third-quarter results in October. Analysts believe that the 40 trillion won repurchase and cancellation plan is expected to form valuation downside support, while raising the shareholder return floor to over 50% of FCF also enhances the certainty of medium- and long-term returns.