Morgan Stanley downgrades Gudeng Precision stock on TSMC EUV delivery concerns
Investing.com
Published Jul 16, 2025 01:03AM ET
Investing.com - Morgan Stanley downgraded Gudeng Precision Industrial Co Ltd (TPE:3680) from Overweight to Equalweight and slashed its price target to NT$340.00 from NT$750.00.
The downgrade comes after Morgan Stanley's industry checks suggested that Taiwan Semiconductor Manufacturing Company's (TPE:2330) 2026 extreme ultraviolet (EUV) scanner deliveries may only grow by one unit to approximately 17-18 units, falling short of some investors' expectations of 20 units.
Morgan Stanley also noted that TSMC's N2 EUV layers will likely remain unchanged from N3 at around 20 layers, contributing to both short-term and long-term headwinds for Gudeng Precision.
The investment bank expects TSMC's 2026 capital expenditure to remain flat year-over-year at approximately US$40 billion, aligning with the modest growth in EUV scanner deliveries.
Gudeng Precision stock is currently trading at around 23 times earnings, which is one standard deviation below its historical average forward price-to-earnings ratio since 2020, a valuation Morgan Stanley considers fair given the revised outlook.
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