South Korea's KOSPI Hits 20-Year P/E Low of 5.78x Amid 25% Decline; Goldman Sachs Maintains 12,000-Point Target

According to Goldman Sachs, South Korea's KOSPI index hit a 20-year valuation low on July 19, with its 12-month forward price-to-earnings ratio falling to 5.78x as of July 16, below 2008 financial crisis levels. The index has declined nearly 25% from its June 22 peak.

Goldman Sachs' July 17 report indicated that even under a stress scenario with 41% earnings cuts, KOSPI's fair value would be around 8,965 points—far above current levels—suggesting strong risk-reward asymmetry at current valuations. The bank maintained its 12,000-point target and recommended building positions on weakness. UBS noted that excluding Samsung Electronics and SK Hynix, KOSPI's forward P/E of 8.79x remains below historical averages.