Goldman Sachs Lowers KOSPI Target, Calling It "Significantly Undervalued"

U.S. investment bank Goldman Sachs has lowered its target for the KOSPI index while diagnosing that the market is currently "excessively undervalued."

According to Bloomberg, Goldman Sachs strategists announced in a report that they were lowering their 12-month target for the KOSPI by 25 percent, from 12,000 to 9,000.

They added that they applied more conservative criteria to corporate valuations as the KOSPI plummeted more than 35 percent from its peak last June.

However, they pointed out that South Korean stocks have become significantly undervalued due to the recent plunge, stating, "The market is pricing in an overly negative outlook on fundamentals."

They continued, "We lowered our target index by reflecting more conservative assumptions in how the market evaluates companies' fundamentals, but the current South Korean stock market remains attractive in terms of risk-reward."

They also explained that even the lowered target index implies more than 60 percent upside potential from current levels.

Goldman Sachs had repeatedly raised its KOSPI target this year, lifting it to 12,000 last June.

Since then, it had maintained that level even amid the spreading sell-off in global AI-related stocks.

Goldman Sachs analyzed that the market is overly pessimistic, noting that current semiconductor stock prices already reflect a forecast of a 65 percent drop in earnings for 2027.

Except for the memory semiconductor sector, other stocks account for about half of the KOSPI, and their forward price-to-earnings ratio stands at just 7.6 times.

Despite lowering the KOSPI target, Goldman Sachs maintained a positive outlook on sectors related to utilities, industrials, corporate governance improvements, domestic economic recovery, and beneficiaries of the K-pop culture wave.

(Reported by Jo Gi-ho | Video by Lee Da-in | Design by Lee Jeong-ju | Produced by SBS Digital News)
※ Please note: This article was translated by AI and may contain errors.