Morgan Stanley has raised its year-end 2026 target for South Korea’s KOSPI index to 6,500 from 5,200, signaling optimism about strengthening earnings and domestic demand. The bank’s bull case now targets 7,500, up from 6,000, while the bear case remains at 5,000. Analyst Joon Seok notes the upside scenario is “more likely to be reached” in the first half of 2026, though uncertainties loom in the second half.

The upgrade reflects higher earnings expectations, with EPS growth projected at 78% versus the prior 60%, driven by the technology sector’s AI-driven memory super-cycle. The P/E multiple is unchanged at 10 times, aligning with historical averages.