Global investment bank (IB) JPMorgan said the KOSPI could climb as high as 6,000 points based on the Korean government's "value-up program." It also argued that investors should increase their allocation to Korean stocks, which remain "undervalued."
On the 28th, in its 2026 Asia equity market outlook, JPMorgan designated Korea, along with Hong Kong, China, and India, as "overweight." It recommended underweight for the rest of the Association of Southeast Asian Nations (ASEAN).
JPMorgan said, "Korea's stock valuation remains undervalued." According to the report, the KOSPI's 12-month forward price-earnings ratio (PER) is about 9.2 times, still undervalued compared with the Asia average of 14.1 times. The price-to-book ratio (PBR) is also low at 1.2 times.
Buoyed by the government's stock market value-up program and a trend toward improving corporate governance, the KOSPI is basically expected to break above the 5,000 level. The analysis is that government policies that encourage dividends, share cancellations, and narrowing holding company discounts will drive a KOSPI re-rating. By scenario, it presented 6,000 in a bull case and even 4,000 in a bear case.
Profit forecasts for the KOSPI in 2026 also support the bullish view. JPMorgan predicted that Korean corporations' earnings per share (EPS) growth rate in 2025 will be 9.6% and that the 2026 growth rate will be 37%, pointing to gains. This is the highest among Asian countries.
It named Samsung Electronics and SK hynix as top picks, reflecting expectations for a full-fledged supercycle in the global memory market. It also had a positive view on growth for power equipment stocks such as HD Hyundai Electric, as expanding power demand from AI data centers coincides with aging global power grids.
Regarding the recent expansion of defense exports, it identified Hanwha Aerospace and others as medium- to long-term beneficiaries. It said export diversification is gaining momentum not only to Europe but also to the Middle East.
It said LG Energy Solution and LG CHEM are likely to benefit from rising demand for energy storage systems. From the perspective of shareholder returns and the appeal of asset soundness, it also gave positive assessments to KB Financial Group and Shinhan Financial Group.