As the KOSPI continued its bullish run, with the index crossing the 5,000 mark intraday for the first time ever, stocks that have already surpassed brokerage target prices are emerging one after another.
According to FnGuide on the 25th, among 233 companies listed on the main board for which three or more domestic brokerages set target prices over the past three months, 16 had closing prices on the 22nd above their targets. That is about 7% of KOSPI stocks with targets.
The stock with the biggest gain versus its target price was SeAH Besteel Holdings. As of the 22nd, the share price was 73,300 won, 30.6% higher than the brokerage average target price (50,875 won). The move is seen as driven by expectations that the company's U.S. specialty alloy subsidiary could benefit after news that SpaceX is pursuing an initial public offering (IPO).
Hyundai AutoEver was also cited as a stock that far exceeded its target price. The current price (465,500 won) is 26% above the target price (344,231 won). Hanwha Systems, Hyundai WIA, SK Square, Korea Aerospace Industries (KAI), and KEPCO E&C also trade above their targets. The recent strength in defense stocks amid rising geopolitical tensions supported sharp gains in some names.
Meanwhile, even in a rising market, many stocks showed wide gaps below their targets. The KOSPI stock with the largest gap versus its target was Contentree JoongAng. The brokerage average target is 13,650 won, but the price on the 22nd was 6,560 won, a gap of 108%.
Kakao Pay also ranked high on the gap list, with its share price at 52,200 won, 76% below the target price (91,667 won). It was followed by Dongwon Industries, Coway, IS Dongseo, and Hyundai Green Food with large gaps versus targets. In particular, many food-related stocks were among the widest gaps, and cosmetics names such as Kolmar Korea and d'Alba Global are also far below target prices.
Brokerages are focusing on profit-taking in recently surging sectors and the possibility of rotation into undervalued sectors. Lee Kyung-min, an analyst at Daishin Securities, said, "Given the sharp rise in the KOSPI, profit-taking in surging sectors and a quick rotation into undervalued sectors could unfold," and added, "Sectors currently undervalued relative to earnings include domestic consumption plays such as cosmetics and consumer staples, as well as health care."