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Taiwan Semiconductor Manufacturing Company Limited: When The Timing Is Right, Sit Tight

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) price on Friday, March 17, rose 0.19% above its previous day’s close as an upside momentum from buyers pushed the stock’s value to $89.47.

A look at the stock’s price movement, the close in the last trading session was $89.30, moving within a range at $89.00 and $90.03. The beta value (5-Year monthly) was 1.24 while the PE ratio in trailing twelve months stood at 14.08. Turning to its 52-week performance, $109.75 and $59.43 were the 52-week high and 52-week low respectively. Overall, TSM moved -3.55% over the past month.

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Taiwan Semiconductor Manufacturing Company Limited’s market cap currently stands at around $451.62 billion. The company has a Forward Dividend ratio of 2.27, with its dividend yield at 2.53%. As such, investors might be keen on an upside in the stock’s price ahead of the scheduled earnings report. Analysts project the company’s earnings per share (EPS) to be $1.22, which has seen fiscal year 2023 EPS growth forecast to increase to $5.54 and about $7.03 for fiscal year 2024. Per the data, EPS growth is expected to be -16.10% for 2023 and 26.90% for the next financial year.

Analysts have a consensus estimate of $16.91 billion for the company’s revenue for the quarter, with a low and high estimate of $16.83 billion and $17.09 billion respectively. The average forecast suggests down to a -3.70% growth in sales growth compared to quarterly growth in the same period last fiscal year. Wall Street analysts have also projected the company’s year-on-year revenue for 2023 to grow to $75.02 billion, representing a -1.10% decline on that reported in the last financial year.

Revisions could be used as tool to get short term price movement insight, and for the company that in the past seven days was no upward and no downward review(s). Turning to the stock’s technical picture we see that short term indicators suggest on average that TSM is a 50% Buy. On the other hand, the stock is on average a 50% Buy as suggested by medium term indicators while long term indicators are putting the stock in 100% Buy category.

38 analyst(s) have given their forecast ratings for the stock on a scale of 1.00-5.00 for a strong buy to strong sell recommendation. A total of 3 analyst(s) rate the stock as a Hold, 31 recommend TSM as a Buy and 4 give it an Overweight rating. Meanwhile, 0 analyst(s) rate the stock as Underweight and 0 say it is a Sell. As such, the average rating for the stock is Buy which could provide an opportunity for investors keen on increasing their holdings of the company’s stock.

The technical evaluation for the stock shows the PEG ratio is 0.65, with TSM’s current price about 0.89% and -0.14% off the 20-day and 50-day simple moving averages respectively. The Relative Strength Index (RSI, 14) currently prints 50.63, while 7-day volatility ratio is 2.56% and 2.20% in the 30-day chart. Further, Taiwan Semiconductor Manufacturing Company Limited (TSM) has a beta value of 1.11, and an average true range (ATR) of 2.56. Analysts have given the company’s stock an average 52-week price target of $100.82, forecast between a low of $75.00 and high of $115.00. Looking at the price targets, the low is 16.17% off current price level while to achieve the yearly target high, price needs to move -28.53%. Nonetheless, investors will most likely welcome a -22.95% jump to $110.00 which is the analysts’ median price.

In the market, a comparison of Taiwan Semiconductor Manufacturing Company Limited (TSM) and its peers suggest the former has performed considerably stronger. Data shows TSM’s intraday price has changed 0.19% in last session and -15.35% over the past year. Comparatively, NVIDIA Corporation (NVDA) has moved 0.72% on the day and only 5.02% in the past 12 months. Looking at another peer, we see that Analog Devices Inc. (ADI) price has dipped -0.42% on the day. However, the stock is 17.20% off its price a year ago. Moreover, Texas Instruments Incorporated (TXN) is also down -0.80% in trading on the day while keeping a a downtrend of -0.35% over the past year. If we look at the PE ratio, we find that Taiwan Semiconductor Manufacturing Company Limited’s ratio stands at 14.08 compared to NVIDIA Corporation’s 147.76 and Analog Devices Inc.’s 28.06. Elsewhere, the overall performance for the S&P 500 and Dow Jones Industrial shows that the indexes are down -1.10% and -1.19% respectively in the last trading.

If we refocus on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), historical trading data shows that trading volumes averaged 10.9 million over the past 10 days and 13.33 million over the past 3 months. The company’s latest data on shares outstanding shows there are 5.19 billion shares.

Also important is the data on short interest which shows that short shares stood at 31.29 million on Jan 12, 2023, giving us a short ratio of 2.28. The data shows that as of Jan 12, 2023 short interest in Taiwan Semiconductor Manufacturing Company Limited (TSM) stood at 0.60% of shares outstanding, with shares short rising to 21.56 million registered in Dec 14, 2022. Current price change has pushed the stock 20.11% YTD, which shows the potential for further growth is there. It is this reason that could see investor optimism for the TSM stock continues to rise going into the next quarter.

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