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Citi Reiterates a 'Buy' on Taiwan Semiconductor (TSM); Dips Enhance Buying Opportunity

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March 10, 2009 10:19 AM EDT

Citi reiterates a 'Buy' on Taiwan Semiconductor (NYSE: TSM).

Citi analyst says, "Although we believe the trough guidance raise is well expected, we reiterate our Buy rating and target of NT$55...We believe the 41-44% qtr-over-qtr 1Q09 sales decline guidance and operating margin contraction to 0% to -2% are already priced in by the stock...After our cycle-to-cycle analysis, we estimate TSMC to see at least a 10% qoq recovery in wafer shipments in both 2Q09E and 3Q09E, similar to the 17% and 20% qoq recoveries in wafer shipments in 2Q05-3Q05 and 2Q07-3Q07, respectively...We rate TSMC shares Low Risk based on our quantitative risk-rating system, which tracks 260-day historical share price volatility."

Taiwan Semiconductor Manufacturing Company Limited (TSMC), incorporated on February 21, 1987, is a foundry in the semiconductor industry.