Goldman Sachs chief Asia Pacific equity strategist Timothy Moe maintains a 12,000 target for the KOSPI index, despite a 24% decline from its June peak. The index currently trades near 6,899, requiring a 74% increase to reach the forecast. Moe argues that the market is underpricing the duration of the current earnings cycle.
The strategist projects earnings growth for KOSPI members at 360% for 2026, with a deceleration to 35% in 2027. The 12,000 target relies on a forward earnings multiple of 7.5 times, compared to the current valuation of 5.3 times. Growth is further supported by expected US Big Tech spending, which Moe estimates will exceed $1.2 trillion next year.
Market volatility in 2026 was driven by SK Hynix and Samsung Electronics, which rose 157% and 106% respectively. However, leveraged fund outflows reached nearly $1 billion in August. Potential risks to the forecast include competition from ChangXin Memory Technologies and political opposition to new data center construction in the United States.
Morgan Stanley also maintains a positive outlook, upgrading Korea to overweight in August with a target of 9,000 for the index. The upcoming quarterly results for major chipmakers will serve as a critical test for whether earnings growth can bridge the valuation gap.
