Samsung slammed with downgrades as Galaxy S4 ‘marketing charm’ fades

It hasn’t taken long for Wall Street’s earlier irrational exuberance over Samsung’s prospects to turn into pessimistic doomsaying. Reuters reports that many formerly bullish analysts are openly admitting that they were caught up in the hype surrounding the launch of Samsung’s Galaxy S4, which caused them to overrate the company’s future earnings potential. Now they’re estimating Galaxy S4 sales will miss expectations by as much as 30% and are hitting Samsung with downgrades that have been hammering the company’s share price.

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“I’d say most forecasters including myself had this conviction that they’ll outperform again — because it’s Samsung,” KB Investment & Securities analyst Byun Hanjoon told Reuters. “They had beaten expectations before, which led many to believe they are bound to excel again with the S4… Expectations for innovation have been lowered, and I don’t think there’ll be as much buzz surrounding new product launches as it used to be.”

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The issue is that the market for high-end smartphones such as the Galaxy S4 and the iPhone 5 seems to have for now hit a plateau while the action has moved more toward low or mid-tier devices that are affordable for consumers in emerging markets. Because of this, Reuters says that “17 out of 43 analysts have downgraded their earnings estimates for Samsung, leading to a 0.6 percent drop in their average forecast for the company’s April-to-June earnings to 10.4 trillion won ($9 billion).”

Although a $9 billion quarterly profit would represent record earnings for Samsung, it’s still below the astronomical figures many analysts were expecting and is a big reason why Samsung’s stock has been hit with an Apple-style selloff in recent weeks.

This article was originally published on BGR.com