Chargeable for 50% of the world’s semiconductor chip parts, Wall Road shall be paying shut consideration to Taiwan Semiconductor’s TSM Q1 outcomes on Thursday, April 17.
Whereas international commerce battle fears have riddled the tech sector, Taiwan Semiconductor has appeased the Trump administration by planning to make investments $100 billion in semiconductor manufacturing crops within the U.S, which may assist the corporate work its manner round a ten% baseline import tax.
The strategic transfer is important as it is going to make TSM much less susceptible to manufacturing dangers, with there being mounting considerations that China might finally invade Taiwan. Moreover, TSM serves main U.S. companies akin to Nvidia NVDA, Apple AAPL, and AMD AMD.
Taiwan Semiconductor’s Q1 Expectations
Taiwan Semiconductor’s Q1 gross sales are anticipated to be up 33% to $25.2 billion in comparison with $18.87 billion within the prior-year quarter. Even higher, Taiwan Semiconductor’s Q1 EPS is assumed to have soared 46% to $2.02 versus $1.38 per share a 12 months in the past. Notably, Taiwan Semiconductor has exceeded the Zacks EPS Consensus for 17 consecutive quarters with a mean earnings shock of seven.55% in its final 4 quarterly stories.
Picture Supply: Zacks Funding Analysis
Monitoring Taiwan Semiconductor’s Outlook
Primarily based on Zacks estimates, Taiwan Semiconductor’s complete gross sales are anticipated to extend 26% this 12 months to $113.51 billion from $90.08 billion in 2024. Plus, FY26 gross sales are projected to spike one other 19% to $135.44 billion.
Picture Supply: Zacks Funding Analysis
Taiwan Semiconductor is slated to submit 29% EPS progress in FY25 with annual earnings projected to soar one other 21% in FY26 to $11.02 per share. Nonetheless, it’s noteworthy that FY25 and FY26 EPS estimates are barely down during the last 60 days.
Picture Supply: Zacks Funding Analysis
TSM Value Efficiency & Valuation
12 months thus far (YTD), Taiwan Semiconductor’s inventory has fallen 20% which has underperformed the benchmark S&P 500’s 8% decline and the Nasdaq’s -13%. That mentioned, TSM continues to be sitting on practically +60% good points during the last three years, to impressively outperform the broader indexes.
Picture Supply: Zacks Funding Analysis
Buying and selling round $157, TSM shares are at a 17.1X ahead earnings a number of which is beneath the benchmark’s 20.1X. What may additionally be catching buyers’ consideration is that TSM trades 50% under its decade-long excessive of 34.4X ahead earnings and is at a slight low cost to the median of 18.2X throughout this era.
Picture Supply: Zacks Funding Analysis
Backside Line
Whereas it’s tempting to purchase the YTD drop in Taiwan Semiconductor’s inventory, TSM presently lands a Zacks Rank #3 (Maintain). To that time, extra upside will largely rely on Taiwan Semiconductor with the ability to attain or exceed Q1 expectations and most significantly, providing reassuring steering or rhetoric that reconfirms its engaging progress trajectory.
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Taiwan Semiconductor Manufacturing Company Ltd. (TSM) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the creator and don’t essentially replicate these of Nasdaq, Inc.
