Analyst Ling Lee Keng of DBS maintained a Buy rating on Tokyo Electron (TOELF – Research Report), with a price target of Yen31,480.00.
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Ling Lee Keng has given his Buy rating due to a combination of factors, primarily driven by Tokyo Electron’s robust growth prospects in the semiconductor equipment industry. The company has shown impressive revenue growth, with a notable year-on-year increase and a strong recovery in its quarterly performance, bolstered by investments in AI and legacy chipmaking in China. Furthermore, Tokyo Electron has revised its FY25 forecasts upwards, surpassing market expectations with an increase in both revenue and net income projections.
In addition to its financial performance, Tokyo Electron holds a dominant position in the semiconductor equipment market, particularly in key process areas like EUV lithography, coater/developer, and etching systems. The company’s strong presence in the logic foundry and DRAM sectors positions it well to benefit from the anticipated recovery in the memory segment and overall WFE spending growth. Despite geopolitical risks, especially with significant revenue exposure to China, Tokyo Electron’s valuation remains attractive compared to peers, supported by high forward ROE and expected earnings growth.
According to TipRanks, Lee Keng is a 3-star analyst with an average return of 3.5% and a 38.27% success rate. Lee Keng covers the Technology sector, focusing on stocks such as Tokyo Electron, Applied Materials, and Lam Research.
In another report released on January 31, Bernstein also maintained a Buy rating on the stock with a Yen31,500.00 price target.