Goldman Sachs Raises KOSPI Target to 7,000, Forecasting 25% Gain
Goldman raised its KOSPI target to 7,000, implying 25% upside, after lifting Korea's 2026 earnings growth forecast to 130% for the third time this year.
Goldman Sachs raised its year-end KOSPI target from 6,400 to 7,000 points, predicting record highs for South Korea's benchmark index on the back of a 130% earnings growth forecast for 2026 — the third upward revision the firm has made this year. At current levels, the 7,000 target implies a price return of roughly 25%, or 28% in U.S. dollar terms once currency appreciation and dividend income are included. The implied target P/E sits at 9.8 times. Goldman simultaneously lifted its year-end target for the MSCI Asia Pacific ex-Japan index from 890 to 900 points, with the KOSPI revision contributing directly to that adjustment.
The bullish case rests almost entirely on semiconductor memory. Sustained capital expenditure by hyperscale cloud providers is driving robust demand for DRAM and NAND, while supply constraints continue to push average selling prices higher. TrendForce revised its ASP forecasts upward again, and South Korea's memory chip exports hit a record high in February. Goldman's Earnings Revision Leading Indicator, known internally as ERLI and designed to predict the direction of sell-side analysts' earnings revisions over the next two months using high-frequency macroeconomic and industry data, is currently most optimistic about South Korea and the technology sector of any market or industry across Asia-Pacific. Slight outperformance in Q4 2025 earnings results further solidified the base from which Goldman projects the 130% 2026 growth figure.
The upgrade comes after a sharp and disorienting stretch for Korean equities. Middle East conflict escalation triggered a broad selloff across Asian markets, with South Korea absorbing some of the worst damage. The KOSPI fell 20% from its February 26 closing high, including a record single-day collapse of 12.06% on March 4, a move that prompted serious debate about whether a bear market had begun. The index then rebounded 10% the following day on March 5, moving back above its 30-day moving average. Goldman interpreted the sequence as evidence of an oversold correction, not the start of a sustained downturn, noting that the 176% gain the KOSPI had accumulated since April 2025 provided significant context for any percentage-point drawdown. Data from foreign investors and retail traders also showed market positioning was not excessively crowded, undermining the case that a structural unwinding was underway.
Goldman maintains an overweight rating on South Korea within its regional allocation. With the ERLI signal pointing firmly toward further upward earnings revisions and memory-chip fundamentals still strengthening, the firm's position is that the recent correction made the market's valuation case more compelling, not less.
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