Daishin Securities has raised its year-end KOSPI target to 7,500, even as geopolitical tensions stemming from the Middle East and heightened oil price volatility continue to cloud the outlook. The brokerage cited faster-than-expected earnings improvements, a semiconductor industry recovery, and policy momentum as reasons to keep the upside open.
In a report released on the 3rd, Daishin Securities lifted its annual KOSPI target from 5,800 to 7,500 points. The new target applies a forward price-to-earnings ratio of 10.32 times to a projected 12-month forward earnings per share of 728 points, reflecting the average valuation since June 2021.
According to the report, the KOSPI's 12-month forward EPS has been revised upward by approximately 10%, from around 555 points at the end of January to over 610 points recently. Daishin Securities estimates that incorporating upgraded earnings forecasts for major sectors could boost overall KOSPI net profit by an additional 13.87%, with semiconductors contributing 11.82%—the largest share.
"The semiconductor industry has entered an upcycle, and the pace and magnitude of earnings forecast upgrades are exceptional," said Lee Kyung-min, a researcher at Daishin Securities. "Given the strong correlation between forward EPS and the KOSPI, the upward trend is likely to continue as long as earnings momentum persists."
The brokerage also sees room for valuation expansion. During previous semiconductor upcycles, the sector's median PER stood at 9.2 times, compared to the current level in the low 7s. Non-semiconductor sectors are entering a re-rating phase as policy effects partially ease the "Korea Discount," the analysis noted. Daishin Securities projects the KOSPI could climb to the 7,400-point range if semiconductor PER recovers to historical median levels and non-semiconductor multiples expand.
However, risks loom in the second half. Potential shifts in monetary policy stance driven by oil prices and inflation, as well as a possible slowdown in earnings growth in 2027, were flagged as concerns. "Geopolitical risks such as the Iran war could amplify short-term volatility," Lee said. "But if rate cuts in the U.S., China, and South Korea, along with fiscal stimulus, gain full momentum, there could be additional upside."