Target Prices Keep Moving Higher Despite Market Volatility, Raising Concerns Over a Growing Gap

[Financial News] Since the beginning of this month, stock market volatility has increased due to geopolitical risks stemming from the Middle East, and securities firms have been adjusting their target prices more sharply. In particular, cases where target prices are revised by more than 20% have surged. Contrary to the usual pattern in times of heightened uncertainty, when adjustments tend to be conservative, upward revisions have recently dominated, prompting concerns that target prices may diverge from the actual market trend.
According to FnGuide on the 22nd, the share of reports in which target prices were raised or lowered by 20% or more rose from 37.5% in January to 42.2% in February, and further to 50.8% as of the 20th of this month. In other words, more than half of the stocks covered in reports are seeing large target price revisions, creating a highly volatile structure.
The scale of target price revisions has expanded even compared with the bullish market in January and February. The KOSPI climbed 23.97% in January and 19.52% in February, but then fell 7.41% in March, marking a clear reversal in the index. Nevertheless, the average rate of upward target price revisions by stock rose from 25.4% in January and 27.0% in February to 36.0% in March. In other words, in this month of heightened volatility, the magnitude of upward revisions has actually grown larger than during the earlier rally.
Although corrections have increased market volatility, the share of reports raising target prices remains high. In March, there were 270 upward revisions and 33 downward revisions, meaning about 89% of all changes were upward. Compared with an upward share of about 79% in January and around 90% in February, the structure remains heavily skewed toward upward revisions regardless of the market’s overall direction.
This pattern is particularly concentrated in certain themes. In nuclear power and power equipment-related stocks, including Daewoo Engineering & Construction (up 143%), the average rate of target price increases exceeded 40%. Semiconductor equipment names such as PSK (up 179%) also drove the move, with related stocks posting average upward revision rates in the 40% range. Financial holding companies and securities firms likewise saw target prices raised on expectations for value-up policies, and including SK Square (up 171%), the group recorded average increases in the high-30% range. Notably, there was not a single case of a target price cut among nuclear power and power equipment-related stocks.
By contrast, target prices were clearly revised downward in some consumer names and in the bio and medical device sectors. For key stocks such as PharmaResearch (down 30%) and Medytox (down 15%), target prices were cut by double-digit percentages, lowering market expectations. As cuts continued to focus on companies with low earnings visibility or rising cost burdens, the gap in sentiment between sectors became more pronounced.
There have also been cases where target prices swung sharply in a short period amid the volatile market. LS Securities raised its target price for HD Hyundai from 309,000 won to 440,000 won on March 3. However, as geopolitical risks in the Middle East intensified and uncertainty surrounding its robotics business grew, the firm lowered the target again to 415,000 won on March 20, just about 17 days later. As the assumptions behind reports are being revised quickly in response to changing market conditions, target prices have been whipsawing in a short span of time.
Analysts caution that the recent wave of target price hikes cannot be viewed in an entirely optimistic light. Some industries, such as artificial intelligence (AI) and nuclear power, may be less exposed to Middle East risks in the short term. However, if higher oil prices persist, they could lead to an economic slowdown and ultimately weigh on all sectors. Experts advise that in a highly volatile market environment, target prices themselves can change rapidly, so investors should exercise caution when using them for investment decisions.
A securities industry official commented, "In a phase like the current one, where market volatility is high, target prices inevitably have to be adjusted quickly in line with market conditions." The official added, "Since upward revisions are concentrated in specific themes, investors should not treat target prices as an absolute benchmark, but rather assess them together with the broader market environment."
koreanbae@fnnews.com Bae Han-geul Reporter