JPMorgan has reiterated its bullish outlook on Taiwan Semiconductor Manufacturing Company (TSMC) with a price target of NT$1,200.00, citing expectations for a robust third-quarter earnings report. The firm anticipates TSMC's revenue to exceed the upper end of the company's forecast, with projected revenues of US $23.3 billion against guidance of US$22.4-23.2 billion. Gross margins are also expected to be at the high end of TSMC's forecast, with an estimate of 54.8% compared to the projected range of 53.5-55.5%.
The positive outlook is driven by strong growth in the N3 technology node, along with expectations for a quarter-over-quarter revenue increase of approximately 10% in the fourth quarter of 2024. Additionally, TSMC is expected to continue seeing strong demand trends for its N3 technology and a persistent supply-demand gap for advanced packaging solutions.
Looking ahead, JPMorgan forecasts 2025 to be a strong year for TSMC, fueled by sustained demand for AI accelerators, expanding N3 engagements, and potential gross margin improvements. Recent reports show significant growth in TSMC's second quarter of 2024, with a sequential revenue increase of 13.6% in NT dollars and 10.3% in USD, along with a rise in gross margin and operating margin.
BofA Securities and Bernstein SocGen Group also maintain positive outlooks on TSMC, highlighting the company's technological advancements, market position, and capital expenditure plans. As TSMC approaches its next earnings date, investors are advised to keep an eye on the company's financial health, market performance, and potential for growth.
Analysis and Breakdown:
In simpler terms, JPMorgan, BofA Securities, and Bernstein SocGen Group are all optimistic about Taiwan Semiconductor Manufacturing Company (TSMC) and its future prospects. They believe that TSMC will report strong earnings in the third quarter of 2024 and continue to perform well in the coming years. This positive outlook is driven by factors such as strong demand for TSMC's technology, advancements in AI accelerators, and potential margin improvements.
For investors, this means that TSMC could be a good investment opportunity, given its solid financial performance, market position, and growth potential. Keeping an eye on TSMC's earnings reports and updates from financial analysts can help investors make informed decisions about buying or holding onto TSMC stock.