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Brokerages raise target prices on TSMC shares to high of NT$310

2019/04/19 19:41:03

Taipei, April 19 (CNA) Several foreign brokerages have raised their target prices on shares of contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) after the company gave an upbeat forecast for the rest of the year in an investor conference held Thursday.

An Asian-based brokerage, one of the upbeat securities houses, gave a target price of NT$310 (US$10.96), the highest among the foreign brokerages that follow TSMC, up from an earlier NT$280.00.

On Friday, TSMC shares closed unchanged at NT$264.50 after investors locked in their earlier gains, resulting in the share price hitting a high of NT$269.50 on the Taiwan Stock Exchange, where the weighted index ended up 0.06 percent at 10,968.60.

In Friday's early trading session, the stock got a strong boost from optimism toward its operations after TSMC gave guidance in the investor conference that the company has gone through a low in operations for this year following a 38.6 percent sequential fall in net profit in the first quarter.

In the first quarter, TSMC posted NT$2.37 in earnings per share, down from NT$3.86 a quarter earlier, when the chipmaker posted US$7.1 billion in consolidated sales in the first quarter, down 24.5 percent from the previous quarter.

In the investor conference, TSMC forecast that its second-quarter sales will range from US$7.55 billion to US$7.65 billion, with a median US$7.6 billion, representing a 7 percent increase from the first quarter.

The chipmaker also maintained an earlier forecast that its revenue for the whole of 2019 will rise slightly. In January, TSMC had forecast that the 2019 sales will grow 1 percent-3 percent from 2018.

The forecast for the whole of 2019 indicates that sales growth momentum will accelerate in the second half of the year.

A U.S.-based brokerage agreed, saying that TSMC has left the worst of this year behind, as inventories in the global semiconductor industry have been tilting toward a healthy level after recent adjustments.

The brokerage, which raised a target price for TSMC shares to NT$300 from NT$260, said the chipmaker is expected to benefit from solid demand for new smartphone models and high-performance computing devices in the second half of this year.

In addition, the brokerage said, TSMC will see shipments of chips made on its advanced 7-nanometer process rising and Apple Inc. and Advanced Micro Devices Inc. are expected to serve as drivers to the Taiwanese firm's sales growth.

Another U.S. securities house, which has high hopes of TSMC's high-end processes, said it is happy to hear TSMC's expectations that it will issue a cash dividend per share of no less than NT$10 next year, compared with NT$10 proposed for this year.

The brokerage has raised its target price on TSMC shares to NT$305 from NT$300.

CNA cannot identify the brokerages because media outlets in Taiwan are not allowed to report the names of foreign brokerages when they give price-moving forecasts for specific stocks or the wider market.

(By Chang Chien-chung and Frances Huang)
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