HSBC updated its financial outlook for Taiwan Semiconductor Manufacturing Co. Ltd. (2330:TT) (NYSE: TSM), raising the price target to NT$1,535.00 from the previous NT$1,410.00. The firm has kept its Buy rating on the stock. This adjustment comes after TSMC reported robust sales figures for the third quarter of 2024, which surpassed their own revenue projections as well as market estimates.
TSMC's third-quarter revenue reached TWD760 billion, marking a 13% increase from the previous quarter and exceeding the company's forecasted range of TWD728-754 billion. The reported revenue was also consistent with the projections made by HSBC and other analysts, which stood at TWD743 billion and TWD749 billion, respectively. The success is attributed to the strong performance of TSMC's advanced nodes, particularly as the 3nm technology continues to gain traction.
The semiconductor giant is expected to achieve a gross margin of 55.5% for the third quarter, according to the analyst. This figure not only surpasses the consensus estimate of 54.7% but also sits at the upper end of TSMC's own guidance range of 53.5% to 55.5%. The precise details regarding the company's financial performance will be further clarified during TSMC's third-quarter earnings call, which is scheduled for October 17, 2024.
Investors and industry observers look forward to the earnings call for a comprehensive analysis of the company's financial health and future outlook.
Taiwan Semiconductor Manufacturing Company (TSMC) displayed robust performance in the second quarter of 2024, with a 13.6% sequential revenue increase and a gross margin rise to 53.2%. The High-Performance Computing (HPC) segment accounted for 52% of total revenue. Furthermore, TSMC raised its full-year revenue guidance to a growth rate slightly above the mid-20s percent in USD terms. The company's capital expenditure for 2024 is projected to be between USD 30 billion and USD 32 billion, primarily allocated to advanced process technologies.
JPMorgan maintained its Overweight rating on TSMC, citing expectations for a robust third-quarter earnings report. The firm anticipates that TSMC's revenue will slightly exceed the company's forecast, with projected revenues of US $23.3 billion. BofA Securities reiterated a Buy rating, highlighting the upcoming delivery of a high-numerical aperture extreme ultraviolet (EUV) lithography tool to TSMC from ASML (AS:ASML), which is expected to enhance the company's capabilities in developing advanced semiconductor processes.
Bernstein SocGen Group updated its outlook on TSMC, increasing the price target to $220 and retaining an Outperform rating on the stock. The firm suggests TSMC is well-positioned to perform better than its peers should a recession occur, due to its advanced technologies and market share gains.
InvestingPro Insights
TSMC's robust financial performance, as highlighted in the article, is further supported by real-time data from InvestingPro. The company's market capitalization stands at an impressive $822.11 billion, reflecting its dominant position in the semiconductor industry. TSMC's revenue growth remains strong, with a 40.07% increase in the most recent quarter, aligning with the article's mention of the company surpassing its own revenue projections.
InvestingPro Tips emphasize TSMC's financial strength. One tip notes that the company has demonstrated consistent earnings growth, which is evident in its reported revenue increase and expected gross margin improvement. Another tip highlights TSMC's strong cash flow generation, which supports its ability to invest in advanced technologies like the 3nm node mentioned in the article.
These insights complement the article's focus on TSMC's performance and future outlook. InvestingPro offers 13 additional tips for TSMC, providing investors with a more comprehensive analysis of the company's financial health and market position.
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