Microvast Holdings announces departure of chief financial officer
On Thursday, Bernstein analysts maintained their Outperform rating on Tokyo Electron Limited (8035:JP) (OTC: TOELY), with a steady price target of JPY34,600.00. The semiconductor equipment manufacturer, currently valued at $71 billion, appears undervalued according to InvestingPro Fair Value metrics, despite trading at a P/E ratio of 20.3x. The firm’s analysts highlighted etching, deposition, and bonding as key growth drivers for the company, projecting that etching revenue could triple in the next five years. This segment is particularly significant for Tokyo Electron, as it accounted for 32% of the company’s revenue in the previous year.
The analysts at Bernstein expressed confidence in Tokyo Electron’s market share gains, noting that the company’s revenue growth targets surpass industry expectations for the etching market, which are estimated at 2.7 times for advanced logic and 2.3 times for DRAM. This optimism is supported by InvestingPro data showing a robust 32% revenue growth forecast for FY2025 and an impressive 47% gross profit margin. Bernstein reiterated their positive stance on Tokyo Electron, attributing their optimism to the company’s strong performance in etching and deposition, areas that are expected to benefit from the shift towards more complex transistor structures and 3D configurations.
Tokyo Electron’s exposure to etching and deposition exceeds 50%, positioning the company to capitalize on these industry tailwinds. Additionally, Tokyo Electron’s significant role in advanced packaging, which already contributes to more than 10% of its revenue, along with its share gains in the semiconductor processing equipment (SPE) market, are seen as potential sources of further upside.
The normalization of revenue from China to the 30% range in the next year was also mentioned by Bernstein as a positive factor, suggesting the removal of an overhang that may have previously affected the company’s performance. With these factors in mind, Bernstein stands by their Outperform rating for Tokyo Electron, indicating strong prospects for growth in the near future. While the stock has experienced a sharp 8% decline over the past week, InvestingPro subscribers can access 8 additional investment tips and comprehensive financial metrics to make informed investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.