On Friday, HSBC updated its financial outlook for Taiwan Semiconductor Manufacturing Co. Ltd. (2330:TT) (NYSE: TSM), increasing the price target to NT$1,025.00 from the previous NT$993.00. The firm continues to recommend a Buy rating for the stock. This adjustment follows TSMC's first-quarter results for 2024 and the second-quarter outlook, which were slightly above expectations.
The revised price target is based on TSMC's earnings per share (EPS) forecast for 2024, which HSBC increased by 3.5%. The firm has also introduced its forecasts for the fiscal year 2026. The valuation is rooted in an unchanged forward price-to-earnings (PE) multiple of 27 times for the fiscal year 2024.
HSBC's decision to retain the Buy rating and raise the target price reflects confidence in TSMC's future growth prospects. The firm anticipates that the semiconductor company's ongoing development and introduction of 3-nanometer technology, along with the long-term growth potential from artificial intelligence (AI) processors, will contribute to TSMC's value appreciation.
The analyst from HSBC expressed optimism about TSMC's potential to reach a price-to-earnings ratio (PER) similar to its historical peak, due to the strategic advancements in manufacturing technology and market demand for AI-related semiconductor products.
TSMC, as a leading player in the global semiconductor industry, is expected to continue its growth trajectory, supported by the strong performance in its recent quarterly results and the positive outlook for the upcoming quarter. The raised target price by HSBC signifies the firm's belief in TSMC's robust fundamentals and strategic positioning in the market.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.