Target Price 'Downgrade' Reports Flooding In

23% Target Price Drop This Month
'Buy' to 'Hold' Opinions Also Significantly Increase
Conservative Views Grow in Securities Industry

On the 21st, the KOSPI opened at 3,012.28, down 0.85 points (0.03%) from the previous trading day, then turned to a slight upward trend after early gains. The won-dollar exchange rate opened at 1,175.5 won, up 1.3 won from the previous trading day. The photo shows the Hana Bank dealing room in Jung-gu, Seoul on the day. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Hwang Junho] Since the beginning of this year, target stock prices in stock reports issued by securities firms' research centers have sharply declined. As market sentiment has weakened, reports have been pouring out with not only lower target prices but also more conservative investment opinions.

According to financial information provider FnGuide on the 13th, among 588 stock reports from securities firms issued up to this month, 136 reports lowered their target prices. This means 22.95% of the stock reports reduced their target prices. In the same period last January, only about 3.31% of reports adjusted their target prices downward.

Compared to last month, the number of stocks with lowered target prices has significantly increased. In December last year, out of a total of 21,735 reports, about 1,873 reports (8.61%) lowered their target prices.

Looking at individual stocks, the lowered expectations for growth stocks stand out. Representative internet sector companies NAVER and Kakao had their target prices lowered by 5 and 6 securities firms, respectively. Due to strengthened domestic and international regulations on these giant platforms and deteriorating supply-demand conditions in the growth stock sector caused by rising interest rates, these stocks have already been on a downward price trend.

Additionally, expectations for convenience store sectors such as BGF Retail and GS Retail have declined as social distancing continued due to COVID-19, and expectations for LG Household & Health Care have decreased due to a drop in duty-free sales performance.

There has also been an increase in reports adopting a conservative view, adjusting investment opinions from 'buy' to 'hold.' Eleven such reports were registered during the same period, a significant increase compared to one report last month. Although the reasons for the cautious investment opinions vary by stock, it is analyzed that the overall investment environment has changed, including the accelerated pace of U.S. monetary tightening, leading to lowered expectations.

Kim Hyung-ryeol, Head of the Research Center at Kyobo Securities, said, "This year, we will experience a change where capital accumulated during the liquidity-driven market of the past two years is actually put to use," adding, "Economic and investment sentiment will be determined by the responses of companies and economic actors adapting to the changing policy environment."

This content was produced with the assistance of AI translation services.