Several stocks are showing significant gains, surpassing analysts' target prices as the KOSPI index has crossed the 8,900 mark for the first time, continuing its short-term surge. However, there are also many stocks with considerable gaps from their target prices, leading to increased scrutiny of overvalued and undervalued stocks in the market.
According to financial information provider FnGuide, as of June 2, among the 231 KOSPI-listed companies for which at least three domestic brokerages have set target prices in the past three months, only 16 companies have current prices exceeding their target prices. LG Electronics topped the list, with its current stock price of 392,500 won being approximately 58% higher than the average target price of 166,750 won.
The rise in LG Electronics' stock is attributed to heightened expectations of collaboration with NVIDIA, particularly following NVIDIA CEO Jensen Huang's visit to South Korea and a potential meeting with LG Group Chairman Koo Kwang-mo. In fact, LG Electronics' stock surged 69% over two consecutive days, from May 29 to June 1, following the news.
Hyundai AutoEver was the second-highest stock exceeding its target price, with its current price of 898,000 won being 31% above the target price of 621,667 won, driven by growing expectations for benefits from Hyundai Motor Group's robotics and SDV strategies. Other companies surpassing their target prices include LG CNS (29.83%), SK Networks (27.18%), Samsung SDS (25.39%), Samsung Life Insurance (24.65%), LG HelloVision (19.03%), LG Innotek (18.71%), SK Telecom (10.64%), and Samsung Electro-Mechanics (7.91%). Notably, four of the top ten stocks exceeding target prices belong to LG Group, indicating a broader impact of the NVIDIA collaboration expectations across the group.
Conversely, several stocks are considered undervalued relative to their target prices. Contentree Central has the highest discrepancy, with its current price of 4,740 won falling 128% below the average target price of 10,800 won. Other notable undervalued stocks include Daehan Shipbuilding (126%), HD Hyundai Marine Engine (100%), Kakao Pay (96%), STX Engine (95%), Hanmi Global (95%), Poongsan (90%), Hyosung TNC (86%), HYBE (85%), and Daewon Pharmaceutical (84.91%). Among the top ten stocks with the largest discrepancies, three are related to the shipbuilding sector, raising interest in the potential for a sector-wide reevaluation.
Analysts recommend maintaining a focus on existing leading stocks while also incorporating undervalued sectors through a 'barbell strategy.' Han Ji-young, a researcher at Kiwoom Securities, highlighted shipbuilding, department stores, power equipment, and securities as promising sectors, while Lee Kyung-min from Daishin Securities pointed to the internet, pharmaceuticals, and biotechnology as areas of interest.
* This article has been translated by AI.
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