© Reuters Barclays bullish on Taiwan Semi (TSM), expect trends to improve
Barclays analysts initiated Taiwan Semiconductor Manufacturing (NYSE:) with an Overweight rating and $105 per share price target in a note Tuesday.
The analysts noted the company’s resilient leadership and added that they expect trends to start showing some signs of improvement from here.
In addition, the analysts said the valuation looks undemanding, while in the longer term, Barclays expects “TSMC to continue to dominate leading-edge production despite increasing competition.”
“New nodes are bringing smaller improvements in performance compared to prior nodes in the past. The saving grace is that power reduction improvements continue at a meaningful pace,” the analysts wrote. “This should drive continued demand for the most advanced chips, but we expect the cadence of some customer migrations to slow. This could allow TSMC to run at lower capital intensity and ‘milk’ production lines for longer, boosting returns.”
“Our proprietary data shows that TSMC has ramped hiring materially in the past three years in the US, suggesting further delays on new fabs could be behind us,” they added. “We expect sequential improvement in revenues in 2024.”
The analysts also stated that the firm believes over the longer term, TSM will continue to dominate leading-edge production despite increasing competition.
Read the full article here
