With Taiwan Semiconductor (TSM) stock on a recent rally, investors are wondering what to do next. Analysts at Bernstein are bullish on the chipmaker, citing strong earnings growth potential and a favorable price-to-earnings ratio.
The company’s gross margin is expected to outperform expectations, with factors such as technology impact and depreciation costs being offset by revenue growth and operating leverage. Bernstein analysts predict that TSM’s gross margin could surpass 55% by 2025.
Additionally, Taiwan Semiconductor is expected to increase its capital expenditure and see a significant rise in free cash flow over the next few years. This could lead to a substantial increase in cash dividends for shareholders.
Overall, Bernstein maintains an Outperform rating on TSM stock and has raised its price target to NT$900, implying a 17% upside from current levels. With the company’s strong growth prospects and potential for increased shareholder returns, investors may want to consider holding onto their TSM shares for the long term.
