Goldman Sachs has cut its 12-month target for the Kospi index to 9,000 points from 12,000, reversing a raise it made on 3 June. The revision appears in a note dated 25 October and co-signed by strategist Timothy Moe. The bank still sees more than 60 percent upside to the index within a year.
Why the bank turned more cautious
The June raise came as Samsung Electronics and SK Hynix were setting records. The Kospi closed at a record 9,114 on 22 June. Since then it has fallen sharply, closing at 5,550.30 on Friday and at 5,469.47 on Monday, down 1.46 percent on the day.
Goldman said valuations of semiconductor makers imply a 65 percent fall in their 2027 earnings. It called that excessively pessimistic. In the bank’s words, “The market is pricing in excessively negative fundamental prospects.”
Valuations and earnings
The Kospi trades on a forward price-to-earnings multiple of about 4 times. Non-memory stocks, which make up about half the index, trade on 7.6 times forward earnings.
Samsung Electronics reported preliminary third-quarter operating profit of 107,400 billion won on 8 October. Analysts expect combined operating profit of 184,400 billion won for Samsung and SK Hynix, about 139 billion dollars. Samsung’s shares closed at 213,000 won on Monday after a 1.16 percent fall. Both companies have finished their share buyback programmes, SK Hynix at 40,000 billion won and Samsung at 15,000 billion won.
Wider risk appetite
Bitcoin touched a low of 79,100 dollars on Saturday, its lowest in five weeks. Elon Musk, chief executive of SpaceX, said debt markets have “almost entirely closed” the tap to companies with little revenue outside AI data centres. He also said more than 200 neoclouds would disappear or be acquired. SpaceX raised 40 billion dollars in debt to buy GPUs, Musk said. The Fed’s decision was due on Wednesday evening.
Related: Goldman Sachs cuts Kospi target 25% but still sees upside
Source: Goldman Sachs
