Taiwan Semiconductor Manufacturing Company (NYSE: TSM) saw its stock price decline by 0.5% during Wednesday’s trading session, closing at $206.33. The stock had reached a low of $204.55 earlier in the day, and trading volume fell 49% to approximately 7.63 million shares, compared to the average volume of 15.09 million shares. The company had previously closed at $207.36.
Analysts have mixed opinions on TSM’s stock performance. Needham & Company reaffirmed a “buy” rating, setting a price target of $210.00 on October 17. Conversely, StockNews.com downgraded the stock from “buy” to “hold” on November 17. Barclays raised its price target from $215.00 to $240.00, maintaining an “overweight” rating on November 18. Overall, two analysts rated the stock as a hold and four issued buy ratings. Currently, TSM has an average rating of “Moderate Buy” and an average target price of $214.00.
TSMC stock dips 0.5%: Analysts mixed on outlook
TSMC has a market capitalization of $1.07 trillion, a P/E ratio of 33.07, and a price-to-earnings-growth (PEG) ratio of 0.93. The company’s stock is trading at a fifty-day moving average price of $194.84 and a 200-day moving average price of $180.42. In terms of liquidity, TSMC reports a debt-to-equity ratio of 0.24, a quick ratio of 2.30, and a current ratio of 2.57.
In its earnings report dated October 17, Taiwan Semiconductor highlighted robust financial performance, posting an EPS of $1.94 for the recent quarter, exceeding analysts’ expectations of $1.74 by $0.20. The company’s revenue for the quarter totaled $23.50 billion, surpassing estimates of $22.72 billion. TSMC also boasts a return on equity of 27.44% and a net margin of 39.10%. Analysts predict that TSMC will achieve an EPS of 6.95 for the current fiscal year.
In addition to the positive earnings report, TSMC announced a quarterly dividend increase, which will be disbursed on April 10. The new dividend of $0.5484 per share represents an annualized dividend of $2.19, yielding 1.06%. This figure marks an increase from the previous quarterly dividend of $0.49. The ex-dividend date is set for March 18, and TSMC maintains a dividend payout ratio (DPR) of 35.10%.
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Institutional trading activities
Recent institutional trading reveals that several large investors have modified their stakes in TSMC. Reston Wealth Management LLC acquired a new stake during the third quarter valued at $25,000. Similarly, Valley Wealth Managers Inc. entered a new position for about $27,000 in the second quarter. Fairscale Capital LLC purchased shares worth approximately $32,000 during the same quarter. Sugarloaf Wealth Management LLC increased its holdings in TSMC by 77.1% in the third quarter, now owning 186 shares valued at $32,000. Archer Investment Corp. also upped its stake by 48.1%, holding 191 shares valued at $33,000 after increasing its position by 62 shares. Overall, hedge funds and institutional investors own 16.51% of TSMC’s stock.
Investors remain watchful amid ongoing discussions surrounding TSMC’s valuation relative to its growth prospects. The semiconductor company is currently experiencing heightened demand fueled by the AI sector and recovery in related markets. TSMC’s capital expenditures in recent quarters reached $24.6 billion, surpassing spending by major industry players like Apple, Tesla, and Nvidia combined. As TSMC’s stock maintains a price-to-sales ratio significantly higher than industry averages, discussions around its valuation will likely persist.
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Featured image credit: TSMC
