"KOSPI at 10,500 by year-end? You can’t trust securities firms," say anxious retail investors who fear missing out [World of Retail Investors]

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[The Financial News] Choi Soo-hyung, 40, a pseudonym, was startled while checking a smartphone alert. A news item had popped up saying that KOSPI could rise past 10,000 and reach 10,500. He suddenly remembered how he had scoffed when securities firms predicted that KOSPI would break 5,000 late last year. In less than half a year, the forecast had nearly doubled.
On the 14th, KB Securitiesraised its annual KOSPI target from 7,500 to 10,500, a 40% increase.The firm said the upgrade was based on the view that the KOSPI market in 2026 is moving faster and stronger than the three-low boom from 1986 to 1989, one of the most powerful rallies in history. It also noted that, amid global investment in Artificial Intelligence (AI), earnings forecasts for KOSPI-listed companies have been rising much faster than the index itself, while valuation pressure has eased at the same time.
Global investment bank Goldman Sachs also set a KOSPI target of 9,000, while JPMorgan Chase said 10,000 was possible in a bull-market scenario. HYUNDAI MOTOR SECURITIES projected that the index could climb to 12,000 in its best-case scenario, and Yuanta Securities Korea saw it reaching 11,600 in a bullish market. Dreamlike numbers kept appearing one after another. Then Choi suddenly recalled an article he had read a week earlier."I heard securities firms have a target-price achievement rate of just 19%."\r\r
That figure came from a study by Kim Jun-seok, a senior research fellow at the Korea Capital Market Institute, who analyzed 740,000 domestic analyst reports over the 25 years since 2000. In the report, Kim pointed out that more than 90% of investment ratings were tilted toward "buy," while the target-price achievement rate stood at only 19%.
In other words,the actual stock price failed to reach the securities firms’ target price in more than four out of five cases. The study found a clear"optimistic bias"in investment ratings, target prices and earnings forecasts. It said this bias was linked to conflicts of interest, including efforts to boost securities firms’ revenue contributions and build friendly relationships with the companies they cover. Optimistic bias refers toa cognitive tendency to underestimate the likelihood of negative events.
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That said, it would be too much to dismiss the steadily rising KOSPI targets as untrustworthy. Forecasts for individual stocks and for the index are different in nature. Individual stocks are more likely to miss the mark depending on company-specific conditions or industry trends, but index forecasts are based on a broader analysis that combines macroeconomic trends, earnings estimates and valuations.
KB Securities also laid out specific reasons for its view. It based the forecast on an estimate that KOSPI operating profit in 2026 will triple from a year earlier to 919 trillion won. Kim Dong-won, head of research at KB Securities, said, "Korea has an industrial structure optimized for building AI infrastructure, including semiconductors, power and robotics, so KOSPI still has plenty of upside despite its recent gains."
Frequent changes in target prices are also a common phenomenon when the market is strong. In many cases, the market has already moved beyond the target before it is even reached.A target price is only a securities firm’s forecast, not a promise from the market. That is why it should be used as a reference, not taken as gospel.
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bng@fnnews.com Kim Hee-sun Reporter