When Concerns Ease, "Find Investment Opportunities in Companies with Large Target Price Discrepancies"
[Asia Economy Reporter Lee Seon-ae] The gap between the KOSPI target price index and the actual price, which had widened due to various concerns and weakened investor sentiment, is narrowing. It has been advised that investment opportunities should be sought in companies where the target price gap is excessively wide compared to usual when concerns ease.
According to DB Financial Investment on the 11th, the S&P 500 index rebounded strongly due to easing concerns over the COVID-19 Omicron variant and the influx of rebound buying. The S&P 500, which started the week with gains on news that Omicron symptoms were not severe, gained further momentum as global pharmaceutical companies mentioned the potential effectiveness of booster shots. This movement recovers most of the losses from the previous two weeks. The KOSPI recorded a two-week consecutive rise, centered on IT sectors where institutional and foreign investors' demand was concentrated.
The KOSPI's 12-month forward earnings per share (EPS), which had been declining since late August, showed a slight rebound. This was due to an increased weighting of 2022 earnings forecasts and upward revisions of earnings estimates for companies benefiting from economic reopening, leading to upward adjustments in earnings forecasts across most sectors. The S&P 500's 12-month forward EPS has been rising for 11 consecutive weeks. Earnings forecasts increased across all sectors except finance, with continued expectations of performance improvements mainly in reopening-related stocks.
Hot Picks Today
"Most Americans Didn't Want This"... Americans Lose 60 Trillion Won to Soaring Fuel Costs
- "Striking Will Lead to Regret": Hyundai-Kia Employees Speak Out... Uneasy Stares Toward Samsung Union
- Man in His 40s Who Kept Girlfriend's Body for a Year After Murder Sentenced to 30 Years in Prison Again on Appeal
- Despite Captivating the Nation for Over a Month... "Timmy" the Whale Ultimately Found Dead
- "If You Booked This Month, You Almost Lost Out... Why You Should Wait Until 'This Day' Before Paying for Flight Tickets"
Seol Tae-hyun, a researcher at DB Financial Investment, said, "When sentiment recovers, investment opportunities can be found in companies with a larger-than-usual target price gap." He added, "Using a standardized indicator of the weekly target price gap over the past year and excluding companies with large differences in analyst opinions on target prices or those whose target prices were revised downward within the last month, companies such as Jeju Air, BGF Retail, SPC Samlip, and Kangwon Land were identified."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
