Investing.com – Morgan Stanley upgraded its stock rating on Korea to overweight following what the firm described as a leverage washout in the market.
The has 36% upside to the firm’s Korean strategist’s target of 9,000, Morgan Stanley said. The firm sees a near-term range of 5,500 to 10,500 for the index.
Valuation support is anchored in and , according to the firm. SK hynix trades at a P/E ratio of 18.3 with impressive gross profit margins of 70%, while InvestingPro data shows analysts expect 60% upside potential. The memory chipmaker’s strong fundamentals are reflected in its “Excellent” financial health score. Morgan Stanley sees thematic tailwinds for industrials, defense, and financials sectors.
The firm holds LS Electric, Hanwha Aerospace, and in its focus lists.
Morgan Stanley referenced its research report titled “Korea Still Has MoJo” in its upgrade commentary.
In other recent news, SK Hynix reported record-breaking second-quarter 2026 results, with revenue soaring to KRW 79.3 trillion and operating income reaching KRW 60.5 trillion. This marks a significant increase, with revenue up 51% from the previous quarter and 257% from the same period last year. The company attributed this growth to heightened demand for AI infrastructure and constrained supply conditions, which led to a sharp rise in DRAM and NAND prices. Despite these strong financial results, SK Hynix shares experienced a decline. Additionally, UBS initiated coverage on SK Hynix with a buy rating, citing a positive outlook due to AI demand, and set a price target of $204.00. Meanwhile, South Korea’s finance ministry announced new measures that will affect single-stock leveraged exchange-traded funds, aiming to impose investment caps and increase trading costs. These developments are part of a broader effort to stabilize the market, with the government planning to maintain a 24-hour monitoring system.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.