Key insights
- Goldman Sachs raised its KOSPI target, citing strong earnings growth in semiconductors and industrials. KOSPI's low P/E ratio and potential for corporate governance reform suggest further upside. Underweighting in global funds and recovering foreign flows support this bullish outlook. While focused on Korea, strength in global semiconductor demand and foreign investment trends can positively influence sentiment towards US tech and emerging market equities.
Investing.com - Goldman Sachs raised its 12-month price target for South Korea’s KOSPI index to 8,000 from 7,000, citing continuing fundamental improvements across semiconductor and industrial sectors. The firm updated its 2026 earnings forecast for the index to show 220% growth.
The KOSPI’s forward price-to-earnings ratio stands at 7.5x, approximately 2.1 standard deviations below average despite the market recovery in April. Goldman Sachs noted that semiconductor earnings improvement has been extraordinary, while the rest of the market has seen 48% earnings growth for 2026.
The firm said the current valuation does not factor in ongoing corporate governance reform and better shareholder returns compared to the historical market environment. KOSPI has historically traded at a median 10x valuation at market peaks.
In a downside scenario assuming a 33% earnings downgrade and 11x multiple at the bottom of historical earnings downturns, Goldman Sachs estimates the KOSPI level would be approximately 6,250. Foreign ownership for the KOSPI semiconductor sector shows light positioning at 1.3 standard deviations below average.
Foreign flows have started recovering after significant selling led by semiconductor names since the end of January 2026. Korea’s allocations remain underweighted across emerging market, Asia ex-Japan and global mutual funds, according to the firm.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.