What Makes This Analyst Cautious On TSMC?

Cowen analyst Krish Sankar initiated coverage of Taiwan Semiconductor Manufacturing Co Ltd TSM with a Market Perform rating and $120 price target, implying an 8% upside.
While he views its "industry-leading" margins, process technology, execution, and market share as giving it a "resilient earnings stream," he sees end demand as "near term peak-ish." He prefers a better entry point on the shares.
He also cites geopolitical risks and rising industry competition, and Capex as reasons for caution.
DigiTimes Asia recently reported that TSMC would likely expand production capacities for its 7nm and 28nm process technologies, apart from its planned 5nm process expansion, which may prompt the foundry to raise its Capex outlook this year.
Price Action: TSM shares traded higher by 0.80% at $110.92 on the last check Monday.

Momentum53.93

Growth81.95

Quality97.60

Value50.44

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