Bank of America Securities released a report indicating that Taiwan Semiconductor Manufacturing Company (TSM, Financial) offers an attractive valuation, with projected price-to-earnings ratios of 14x and 11.5x for the next two years. This comes after the stock's downturn during 2022's semiconductor slump, marked by geopolitical tensions like Pelosi's Taiwan visit, when its P/E ratio hit a low of 10x.
The bank anticipates TSM to maintain competitiveness and growth, despite inevitable tariff-related impacts. Reflecting geopolitical and tariff-driven consumer demand uncertainties, they reduced TSM's earnings forecast for 2025-2026 by 4% to 5%, and adjusted its U.S. stock price target from $265 to $240, while reaffirming a "buy" rating.
TSM is expected to update guidance at its first-quarter 2025 earnings meeting in April. Key focus areas include the potential impact of tariffs, progress on a joint venture with Intel (INTC), U.S. investment plans and financial implications, and the outlook for AI demand and advanced packaging technology.
