Goldman Sachs cuts its 12-month Kospi target for South Korea by 25% to 9,000 points
Goldman Sachs strategists cut their 12-month target for South Korea’s benchmark Kospi index from 12,000 points to 9,000 points, a 25% reduction. The bank had previously raised its target several times this year and lifted it to 12,000 points in June. The cut came after the Kospi fell more than 35% from its June high.
Strategists including Timothy Moe said in a report that the cut was to incorporate more conservative assumptions about how the market is pricing corporate fundamentals. The report said the market is pricing in an overly negative fundamental outlook, and Korean stocks are significantly undervalued. Even under the new target, it still implies more than 60% upside from current levels.
The Kospi’s 12-month forward price-to-earnings ratio has fallen to about 4 times, one of the lower levels among major markets since 2006. Semiconductor valuations currently imply a sharp decline in industry earnings in 2027, estimated at about 65% in the report, and Goldman Sachs said that scenario is too pessimistic. Forward valuations for the non-memory-chip portion of the index, which makes up about half, are low.
Original sources:
Title: Goldman Cuts Kospi 12-Month Target by 25% as AI Trade Unravels Publisher: Bloomberg Publication date: 2026-10-25 URL: https://www.bloomberg.com/news/articles/2026-10-25/goldman-cuts-kospi-12-month-target-by-25-as-ai-trade-unravels Source nature: media report Verification status: This report was actually read for this item, verification date 2026-10-26 Supporting content: supports the target cut from 12,000 to 9,000 (down 25%), a drop of more than 35% from the June high, still more than 60% upside, and the backdrop of AI-related concerns
Title: Goldman Cuts Kospi 12-Month Target by 25% as AI Trade Unravels Publisher: Yahoo Finance (syndicated from Bloomberg) Publication date: 2026-10-25 URL: https://finance.yahoo.com/markets/stocks/articles/goldman-cuts-kospi-12-month-074443032.html Source nature: media report Verification status: full text actually read for this item, verification date 2026-10-26 Supporting content: supports the specific figures, the strategists’ wording (the market is pricing in an overly negative outlook), the semiconductor earnings implied scenario, and the non-memory segment valuation
ABAB AI Insight
After Goldman Sachs raised its Kospi target to 12,000 points in June this year, it kept that level until a report around October 25 cut it by 25% to 9,000 points. The adjustment was mainly based on the index falling more than 35% from its June high, as well as valuation pressure from worries about AI-related capital spending and returns. The strategists explicitly attributed the cut to more conservative valuation assumptions, rather than to a broad downgrade of fundamentals.
The report also stressed that current valuations already reflect overly pessimistic expectations: the forward P/E is about 4 times, semiconductor valuations imply a sharp decline in 2027 earnings, estimated at about 65%, and the non-memory portion is trading at lower multiples. The new target still corresponds to more than 60% upside from current levels. South Korea’s market weight is concentrated in memory-chip companies such as Samsung Electronics and SK Hynix, and uncertainty over the scale of AI infrastructure investment and returns directly affects index performance.
Indicators to watch include whether other institutions follow with target cuts, whether semiconductor earnings expectations are revised down further, and whether Kospi forward P/E and non-memory sector valuations recover.
ABAB News · Cognitive Law
Goldman Sachs cut its 12-month target by 25% from 12,000 points to 9,000 points, based on more conservative valuation assumptions.
After the cut, the new target still implies more than 60% upside from current levels.
Semiconductor valuations imply a scenario of a sharp decline in 2027 earnings, which the report said is too pessimistic.