Goldman Sachs has increased its 12-month price target for the KOSPI index to 8,000, up from its prior 7,000 projection, citing ongoing fundamental improvement across semiconductor and industrial sectors. The firm also revised its 2026 earnings forecast for the KOSPI to reflect expected growth of 220%.
Goldman noted that the index's forward price-to-earnings ratio is 7.5x, which it described as roughly 2.1 standard deviations below the long-run average despite a market recovery during April. The bank singled out an "extraordinary" earnings rebound in the semiconductor segment, while the remainder of the market is projected to record 48% earnings growth for 2026.
The brokerage argued that current valuations do not fully incorporate progress on corporate governance reforms or the potential for improved shareholder returns relative to historical market conditions. Historically, the KOSPI has traded at a median valuation near 10x at market peaks, a figure Goldman used as a reference point for valuation context.
Goldman also outlined a downside case to illustrate risks: assuming a 33% downgrade to earnings combined with an 11x multiple - a level observed near prior bottoms during earnings downturns - the firm estimated the KOSPI could fall to about 6,250.
On positioning, the bank reported that foreign ownership of KOSPI semiconductor names remains light, at 1.3 standard deviations below the mean. After heavy selling led by semiconductor stocks since the end of January 2026, foreign flows have begun to recover, according to Goldman. The firm additionally noted that Korea allocations remain underweighted across emerging market, Asia ex-Japan and global mutual funds.
Goldman's revised target and earnings outlook underline the firm’s assessment that profit momentum, particularly within semiconductors, is a primary driver of the higher valuation case. At the same time, its downside scenario and observations on foreign positioning reflect potential vulnerability if earnings expectations weaken or if foreign demand does not continue to normalize.
Information presented above is confined to the figures and scenarios communicated by Goldman Sachs; where details were not specified by the firm, this article does not expand beyond those statements.