[Edaily Reporter kyoungeun kim ] Forecasts indicate that in the fourth quarter, the domestic stock market will see earnings lifting the index’s lower bound, while U.S. real interest rates cap the upper bound. Analysts suggest that a “re-rating” will only be possible when earnings upgrades coincide with stability in real interest rates and the won.

In its “Q4 Stock Market Outlook” report released on the 30th, Shinhan Investment Securities projected a KOSPI range of 6,500 to 8,300 for the fourth quarter. This figure is based on a 12-month forward earnings per share (EPS) of 1,314 points for the fourth quarter, an interest-rate-adjusted price-to-earnings ratio (P/E ratio) of 8.42, and a confidence level of 75%.
Noh Dong-gil, a research fellow at Shinhan Investment Securities, stated, “The third-quarter correction in the domestic stock market was the result of a contraction in multiples rather than a deterioration in earnings,” adding, “Following the U.S. Federal Reserve’s Federal Open Market Committee (FOMC) meeting, the U.S. real interest rate has risen to 2.85%, putting downward pressure on the PER.”
Research Analyst Noh explained, “A 12-month forward PER of 5.5x is a figure that demonstrates price attractiveness, while also representing the multiple required by the current environment of higher interest rates.” This implies that since a higher discount rate results in a lower multiple being applied to the same earnings, it is difficult to interpret a low PER as an immediate sign of undervaluation. Despite the strengthening won, foreign investors have net sold 21.8 trillion won over the past four weeks.
Earnings were viewed as a factor supporting the market bottom. Third-quarter operating profit for the 555 KOSPI-listed companies is estimated to increase by 26 trillion won compared to the previous quarter, with the semiconductor sector accounting for the entire increase at 33.3 trillion won. Research Fellow Noh stated, “The key will be the revision of profit estimates in November following the October earnings reports,” adding, “Companies whose EPS was raised after beating earnings expectations in the past posted the highest four-week outperformance at 3.33 percentage points.”
The semiconductor sector was assessed as having the highest profit visibility for next year as well. The report projected that the growth rate of DRAM demand in 2027 (25.1%) will outpace supply (24.6%), leading to continued supply shortages, with a shift to oversupply expected in 2028. Shareholder returns also provide a floor for the market. SK hynix(000660)plans to repurchase 40 trillion won worth of its own shares on the open market and cancel them in full; the resulting increase in EPS is estimated to be approximately 3.0–3.4%.
In the non-semiconductor sector, shipbuilding and power equipment were identified as priority sectors. The order backlogs of the four major shipbuilders secured 169–214% of their 2027 revenue, while HD HYUNDAI ELECTRIC(267260)(177%) and HYOSUNG HEAVY INDUSTRIES(298040)(335%) also have enough orders to cover more than a year’s worth of revenue. Cosmetics, whose exports rose 44.3% in July and August, were cited as the next candidate for growth.
Research Fellow Noh advised, “A correction around the 7,000 level presents an opportunity to increase exposure as long as next year’s earnings hold,” but added, “Since South Korea ranks third in global allocation preferences after Taiwan and the U.S., the pace of increasing exposure should be slowed if rising real interest rates and a strengthening dollar are the causes of the correction.”