Goldman Sachs cuts its target price for Korean equities by 25%, but says “memory valuations are overly pessimistic,” noting that Korean equity valuations have become “the lowest globally.”

Goldman Sachs’ strategy team released a research report on October 25, slashing its 12-month target for the Korea Composite Stock Price Index (KOSPI) from 12,000 to 9,000—a 25% reduction—amid the KOSPI’s nearly 40% decline from its June peak. Despite the steep downward revision, Goldman Sachs maintained its “Overweight” rating on Korean equities, underscoring that even at the new target level, the KOSPI implies over 60% upside from current levels. The report notably stated: “Markets are pricing in a fundamentals scenario far more pessimistic than reality”—a characterization directly targeting the semiconductor sector’s excessively bearish valuation, which has significantly decoupled from underlying fundamentals. As the AI-driven trading frenzy cools and tech stocks face broad-based selling pressure, South Korea’s equity market has rapidly shifted from one of the world’s hottest major markets at the start of the year to a global valuation low. According to Bloomberg-compiled data, the KOSPI’s 12-month forward P/E ratio has now fallen to approximately 4x.