"Profits at Record Highs but Momentum Slows"... Korean Stock Market Enters a Confirmation Phase

Analysts say the domestic stock market is entering a phase where investors are looking to verify whether companies can live up to heightened earnings expectations.
According to financial data provider FnGuide Inc. on the 25th, the 2026 net profit consensus for 264 listed domestic companies has been revised up by 11.7% over the past month.
Consensus net profit for the first quarter of 2026 has been raised by 6.1% from a month earlier, and by 8.6% for the second quarter.
Quarterly earnings expectations are climbing rapidly.
The profit level itself is already near an all-time high.
Operating profit for the Korea Composite Stock Price Index (KOSPI) in 2026 is projected at 636 trillion won and net profit at 484 trillion won, both showing sharp increases.
On a first-quarter basis, operating profit is forecast at 132.5 trillion won and net profit at 102.4 trillion won, implying triple-digit growth rates.
Earnings momentum therefore remains robust.
Semiconductors are leading the upward revisions in earnings.
Expectations of a deepening memory supply shortage and higher average selling prices (ASPs) are driving a structural rise in profit estimates across the sector.
In fact, semiconductors ranked among the top industries for one-month net profit consensus upgrades, alongside trading companies and capital goods and chemicals. Earnings improvement centered on semiconductors is clearly emerging as the main engine of overall profit growth for Korean companies. The issue now is the pace of growth. Recently, the uptrend in earnings per share (EPS) has begun to slow. The earnings revision ratio has also started to decline from its peak. This suggests that while earnings levels are high, the room for further upward revisions may be limited. Macroeconomic uncertainty lies behind this shift. Rising tensions between the Islamic Republic of Iran and the United States of America (U.S.) have heightened geopolitical risks, putting upward pressure on oil prices and increasing cost burdens for companies. At the same time, if upward pressure on interest rates persists, it could lead to investment cutbacks by global big tech companies. This would be a key variable for profit estimates across the broader IT sector, including semiconductors. There are also clear differences by sector. While semiconductors and chemicals continue to see upward revisions, earnings consensus for hotels and leisure, IT home appliances, and energy has been revised downward. In particular, higher fuel costs and airfares stemming from Middle East–related risks are raising concerns about weaker demand for hotels and leisure. IT home appliances, which include secondary battery-related businesses, are also feeling the impact of slowing demand. Experts therefore judge that the market is shifting from a phase of rising profit levels to one of verifying those profits. If companies fail to meet already elevated expectations, stock price volatility is expected to increase. Brokerages agree that the focus should now be on how actual earnings stack up. They note that stock prices are more likely to be driven by whether results beat consensus and deliver an earnings surprise, rather than by the absolute level of profits. Indeed, many of the stocks expected to post earnings surprises in the first quarter are large-cap semiconductor names and other major companies, concentrating market expectations on these groups.
dschoi@fnnews.com Choi Doo-seon Reporter