Goldman Sachs Raises Kospi 12-Month Target to 12,000 From 9,000

Target raised from 9,000 to 12,000 in less than a month

Sees another 36% upside from current levels

Goldman Sachs raised its 12-month target for the Kospi to 12,000 from 9,000, citing a semiconductor upcycle that is lasting longer than expected and improving corporate earnings forecasts. The bank had raised its target to 9,000 from 8,000 in early May, less than a month before lifting it again.

Goldman Sachs raised its Kospi target to 12,000 in a report on the South Korean market released on June 3. The new target implies about 36% additional upside from current levels.

The main driver behind the increase is stronger earnings expectations. Goldman Sachs had forecast Kospi earnings growth of 48% for 2026 at the start of this year, but now puts that figure at 277%.

It also said its forecast for earnings growth this year, excluding Samsung Electronics Co. and SK Hynix Inc., rose to 57% from 20% in January.

Goldman Sachs also maintained a positive view on the semiconductor cycle. The bank said memory makers are gaining pricing power as computing demand rises faster than memory supply.

"South Korean semiconductor stocks are currently trading at about five times forward price-to-earnings, and the market remains skeptical about how long this period of high profitability can last," Goldman Sachs wrote. "But we are confident this cycle will last longer than in the past."

Goldman Sachs said the Kospi has already more than doubled this year, while Samsung Electronics and SK Hynix now account for more than 50% of the index's market capitalization, leaving it vulnerable to a short-term pullback. Even so, the bank said the market remains attractive for long-term investors because earnings continue to support the rally.

"A short-term correction may come, but because corporate earnings are backing the market, any pullback would be a buying opportunity," Goldman Sachs added.

Hong Min-seong, Hankyung.com reporter, mshong@hankyung.com