Taiwan Semiconductor Manufacturing Shares Rise 4.9% After Strong Earnings Report

On January 18, 2025, shares of Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) saw a significant increase of 4.9% after the company released its quarterly earnings, which surpassed analysts' expectations. The stock reached a peak of $221.95 before settling at $216.87. During the trading session, 23,181,844 shares changed hands, marking a 41% increase from the average trading volume of 16,389,395 shares. Prior to this surge, the stock closed at $206.80.

Taiwan Semiconductor Manufacturing reported earnings per share (EPS) of $2.24 for the quarter, which exceeded the consensus estimate of $2.16 by $0.08. The company maintained a strong net margin of 39.10% and a return on equity of 27.44%, showcasing its solid financial performance.

Dividend Increase Announced

In addition to its robust earnings, Taiwan Semiconductor Manufacturing disclosed an increase in its quarterly dividend. Shareholders on record as of March 18 will receive a dividend of $0.5484, payable on April 10. This marks an increase from the previous quarterly dividend of $0.49, translating to an annualized dividend of $2.19 and a yield of 1.04%. The company's current payout ratio stands at 30.77%, indicating a balanced approach to returning value to shareholders while retaining enough capital for growth.

New Analyst Price Targets

Analysts have responded favorably to Taiwan Semiconductor Manufacturing’s strong earnings, with several firms issuing revised price targets. Needham & Company LLC reaffirmed a "buy" rating with a target of $225.00. Meanwhile, Barclays raised its price target from $240.00 to $255.00, also categorizing the stock as "overweight." Other analysts, such as Susquehanna, maintained a "buy" rating as well. However, StockNews.com adjusted their stance, reducing the rating from "buy" to "hold." Currently, the average consensus rating for the stock is "Moderate Buy," with a target price of $220.00 according to MarketBeat data.

Institutional Activity

The stock has attracted attention from several hedge funds recently. Private Client Services LLC took a new position valued at $201,000, while Trust Co of the South grew its stake by a remarkable 232.8% in the fourth quarter, holding a total of 8,869 shares worth $1,752,000. Other significant transactions included Headwater Capital Co Ltd acquiring a new position worth approximately $49,372,000 and NRI Wealth Management LC purchasing shares valued at around $1,545,000. Hedge funds and institutional investors currently hold about 16.51% of the company’s stock.

Current Financial Metrics

The financial health of Taiwan Semiconductor Manufacturing remains robust, with a current ratio of 2.57, a quick ratio of 2.30, and a low debt-to-equity ratio of 0.24. The company boasts a market capitalization of $1.10 trillion, with a price-to-earnings ratio of 33.90 and a PEG ratio of 0.76. Over the last 50 days, the stock's moving average price is $197.81, while the 200-day moving average stands at $184.17.

Company Overview

Taiwan Semiconductor Manufacturing Company Limited is a major player in the semiconductor industry, engaging in the manufacturing, packaging, testing, and sale of integrated circuits and other semiconductor devices. The company operates globally, providing various wafer fabrication processes, which include complementary metal-oxide-semiconductor (CMOS) logic and mixed-signal devices, among others.

Taiwan, Semiconductor, Earnings