TSMC price target raised to NT$900 from NT$850 at JPMorgan

JPMorgan raised the firm’s price target on TSMC (TSM) to NT$900 from NT$850 and keeps an Overweight rating on the shares. The firm expects TSMC to report healthy Q1 2024 results and guide for 7% quarter-over-quarter growth in Q2 revenues and gross margins remaining around 52% levels. JPMorgan believes that TSMC is likely to raise its capex guidance range to $30B-$34B to reflect accelerated build-out in Advanced Packaging and pull-in of N2 capacity deployment in its Kaohsiung Fab. The firm further expects FY24 revenues to come in at the high-end of guidance range of low-mid 20% growth, but does not expect TSMC to change revenue guidance in the upcoming earnings conference on April 18th. Overall, TSMC’s messaging is likely to be quite positive with likely upside in AI demand, strong demand for N3 and good early signals on N2. It also believes TSMC is likely to reiterate its process technology leadership over Intel and counter some of Intel’s (INTC) claims on technology and cost leadership with its 18A/14A process nodes.