BNP Paribas reiterated its buy rating for Samsung shares on Tuesday, adding that the stock had a 38.6 percent upside from Monday's close with a target price of 2,030,000 won.
Analyst Peter Yu said in a note that while the recall's cost is likely to be higher than expected, customers don't appear to be leaving Samsung.
"Telcos at least have purchased more Galaxy S7/S7 Edges to replace demand for Note 7s rather than moving to other smartphone vendors. Hence, Samsung has maintained its 3Q16 smartphone shipment guidance despite the expected impact on Note 7 sales," Yu wrote in a note.
"So, if Samsung's customers are not leaving Samsung, its business outlook is not as bleak as the share price correction implies, and we think it will bounce back."
A note by Morgan Stanley also echoes the sentiment suggesting that Galaxy S7 sell-through remains strong. The analysts at the investment bank also noted that no additional reports of Note 7 fires have been reported since Friday, the battery issues are "rare and not complex", and the Note 7 is selling in China and Hong Kong using a different battery supplier.