Alexa

Deutsche Bank ups TSMC earnings forecasts on mobile demand

Deutsche Bank ups TSMC earnings forecasts on mobile demand

Taipei, Jan. 20 (CNA) Germany's Deutsche Bank AG has raised its earnings forecast for Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chip maker, because of rising demand for its 28- and 20-nanometer products. In a research note dated Jan. 17, Deutsche Bank raised its projections for TSMC's earnings per share by 1 percent to NT$7.53 for 2013 and by 7 percent to NT$9.04 for 2014. The bank now expects TSMC's EPS between 2013 and 2015 to reach a compound annual growth rate of 18 percent, higher than its previous estimate of 14 percent and the 2007-2012 average of 11 percent. "We forecast TSMC's increased dominance and growing addressable markets in 28/20 nanometers to drive stronger earnings growth," Deutsche Bank research analyst Michael Chou wrote in the note. The bank also raised its target price for TSMC from NT$112 to NT$123, the highest among 10 foreign brokerages, and maintained its "buy" rating on the stock. Shares of TSMC closed 2.22 percent higher at NT$101.5 in Taipei Friday after the Hsinchu-based company announced better-than-expected fourth-quarter results on Jan. 17. The foundry operator reported NT$166.16 billion in net profit for the fourth quarter of 2012, a 23.8 percent annual increase, and consolidated sales of NT$506.25 billion, up 18.5 percent from a year earlier. Both figures were the highest in the company's history. TSMC has EPS of NT$6.41 in 2012, compared with NT$5.18 in 2011. U.S. brokerage Goldman Sachs gave TSMC shares a "buy" rating and raised its target price from NT$112 to NT$115, citing improving profitability and a bullish outlook for its 20-nanometer wafer orders. Bank of America Merrill Lynch disagreed with its more optimistic peers, maintaining its "underperform" rating for TSMC and its target price of NT$94. The brokerage based its more pessimistic forecast on TSMC's increase in estimated depreciation for 2013, which reflects higher anticipated spending in the first and second quarters to meet robust demand for 28-nanometer mobile chips. (By Jeffrey Wu)


Updated : 2021-04-12 14:38 GMT+08:00