Goldman, KOSPI target 12,000 → 9,000... “Still, there is more than 60% upside potential.”

(Seoul = Yonhap News) Reporter Shin Jae-woo = Investment bank Goldman Sachs lowered the KOSPI 12-month target index by 25% from 12,000 to 9,000.

According to Bloomberg News on the 25th (local time), Goldman Sachs strategists, including Timothy Mo, said in a report today that they applied a more conservative standard to evaluate corporate value after the KOSPI plunged more than 35% from its peak in June.

However, they diagnosed that Korean stocks were significantly undervalued due to the recent plunge, saying, “The market is reflecting an overly negative fundamental outlook in stock prices.”

He added, “Although we lowered the target index to reflect more conservative assumptions in the way the market evaluates the fundamentals of companies, the current Korean stock market is still attractive in terms of return versus risk.”

At the same time, he explained that the downwardly adjusted target index also means upward potential of more than 60% from the current level.

Goldman Sachs has raised the KOSPI target index several times this year, raising it to 12,000 in June, and has maintained it since then even as the sell-off of global AI-related stocks spread.

KOSPI, which has a large presence in semiconductor companies such as Samsung Electronics and SK Hynix, was hit hard by the enormous scale of investment in AI infrastructure, increased funding costs, and growing doubts about investment profitability.

This selling pressure spread beyond semiconductors to the entire Korean stock market.

Bloomberg diagnosed that the Korean stock market, which was the hottest among the world's major stock markets this year, has turned into the world's cheapest market after its plunge.

KOSPI's price-to-earnings ratio (PER), which measures the stock price compared to expected profits for the next 12 months, has fallen to about 4 times. This is the lowest level seen for the first time since 2006 across 18 stock markets compiled by Bloomberg.

Goldman Sachs analyzed the market as being overly pessimistic, saying that the current stock price of the semiconductor industry even reflects the forecast that profits will decline by 65% ​​in 2027.

Excluding the memory semiconductor industry, the remaining stocks account for about half of the KOSPI, and their forward PER is only 7.6 times.

While lowering the target index, Goldman Sachs maintained a positive view on power and industrial goods, stocks related to corporate governance improvement, and companies benefiting from the recovery of the domestic economy and the spread of Korean pop culture.