Foreign Investment Banks Bullish on Korean Stock Market, Anticipate Semiconductor Rally

Foreign investment banks (IBs), such as Morgan Stanley, have issued positive outlooks for the South Korean stock market, analyzing that an upward rally led by semiconductors is likely to continue. These institutions view the recent temporary dip in the KOSPI index as a 'breather,' attributing the sluggish performance to accumulated fatigue from a prolonged upward rally and factors related to memory semiconductors. They also assessed the fundamentals of semiconductor and AI-related stocks as robust.

Nomura Securities raised its target price for Samsung Electronics from KRW 590,000 to KRW 670,000, forecasting its return on equity (ROE) to be around 60% for 2026-2027. Daol Investment & Securities also increased Samsung Electronics' target price from KRW 450,000 to KRW 585,000, citing HBM4 shipments and strong Average Selling Prices (ASP) as supporting reasons.

Daol Investment & Securities explained that HBM4 began partial shipments in the second quarter and will gradually expand from the third quarter, leading to an overall ASP that is stronger than anticipated. Consequently, they revised Samsung Electronics' second-quarter operating profit estimate upwards by 4.3% to KRW 93.265 trillion, adding that this is a point where its ideal profit trajectory, compared to competitors, could be highlighted.