Goldman Sachs lowered its 12-month target for the Kospi to 9,000 from 12,000, citing heightened market volatility and slowing earnings momentum. Its overweight stance on South Korean equities remains unchanged because the revised target still implies more than 60% upside from current levels. The Kospi has fallen 40% from its record highs, while its price-to-earnings ratio stands at around four times, roughly three standard deviations below its historical average. Goldman Sachs estimates that stocks outside the memory chip sector, which account for about half of the index, remain more than 30% undervalued, whereas memory chip valuations imply an approximately 65% decline in 2027 earnings. The downgrade comes after $1 billion in foreign outflows from South Korean equities amid concerns about AI spending, rising oil prices and increasingly hawkish central banks in Asia.
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