Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE: TSM) is slated to unveil its first-quarter financial results on April 18 before the market opens, attracting significant attention from investors. Here’s a breakdown of the key earnings estimates, analyst sentiments, and crucial factors for investors to monitor:
Earnings Estimates: Analysts are anticipating Taiwan Semiconductor to report first-quarter revenue of $18.395 billion, as per data from Benzinga Pro. This projection marks an increase from the $16.719 billion revenue reported in the corresponding quarter of the previous year. The company has a track record of surpassing revenue estimates in seven out of the last ten quarters.
The company’s guidance had previously indicated a first-quarter revenue range of $18 billion to $18.8 billion. Analysts are also forecasting earnings per share (EPS) of $1.32 for the quarter, surpassing the $1.31 reported in the same period last year. Taiwan Semiconductor has consistently outperformed analysts’ EPS estimates for ten consecutive quarters.
Analyst Sentiments: Notably, Taiwan Semiconductor has been hailed as one of the “best pick-and-shovel stories” by a leading analyst. Needham analyst Charles Shi reiterated a Buy rating on the stock and raised the price target to $168. Despite acknowledging a potential short-term impact from an earthquake in Taiwan that disrupted chip production in April, Shi remains optimistic about the company’s prospects. He believes that any missed sales could be recuperated in the third quarter, with full-year estimates remaining intact.
Other analysts have also expressed bullish sentiments, with Barclays maintaining an Overweight rating and raising the price target to $145, while Susquehanna reiterated a Positive rating and increased the price target to $180.
Key Items to Watch: The impact of the earthquake and potential production disruptions will be closely monitored during the earnings call. Investors will be keen to understand the financial implications and whether sales will be deferred or recouped later in the year.
Additionally, updates on Taiwan Semiconductor’s newly announced plants in Arizona and Germany are anticipated. The company was awarded $6.6 billion under the CHIPS Act by the U.S. Commerce Department for the Arizona plant, slated to commence operations by 2030. Insights into the timeline and progress of these projects will be of interest to investors.
Furthermore, commentary on demand dynamics, particularly as a key supplier for Apple Inc. and NVIDIA Corp., will be scrutinized. Given its involvement in smartphone production, any insights into smartphone sales trends and implications for the broader market will be closely watched.
Price Action: Shares of Taiwan Semiconductor are currently trading at $139.02, down 0.57% on Wednesday. Over the past year, the stock has demonstrated robust growth, with a 52-week trading range of $81.21 to $158.40, reflecting a 57% increase.
In conclusion, Taiwan Semiconductor’s first-quarter earnings release is expected to provide valuable insights into its performance, industry dynamics, and future prospects, making it a focal point for investors seeking to gauge the trajectory of the semiconductor sector.