2Downgrade reports have surged ahead of quarterly earnings.

After the KOSPI hit a record high, the share of reports from securities firms that lowered target prices rose sharply.2As quarterly earnings season is just beginning, it was said that this trend in reports could be linked to volatility in investment indicators.

Reports issuing upward outlooks have fallen sharply. In the semiconductor sector, the share of downgrades was relatively low, and2target-price adjustments were frequent in the secondary battery and entertainment sectors.

Some securities firm reports shifted to a more conservative outlook while lowering target prices. The reports were mainly said to cite earnings uncertainty or weaker near-term demand as reasons.

Among investors, there is a reaction to the lowering of target prices. Market participants said stock-by-stock volatility increased from the point when reports began to come out.

In the securities industry, there is a sense of watching to see whether additional target price adjustments will continue, based on the quarterly results and conference calls to be announced in the future. It was said that once earnings announcements are underway, the direction of the reports will become clearer.

The current trend is summed up as a situation in which a more conservative stance in reports and the start of earnings season are overlapping. For the time being, individual stocks are expected to see frequent rises and falls on news of target price changes.