Tower Semiconductor: this is a pricing structure, not a cycle

Contract pricing held firm while the commodity tier rolled over. There is no second source at the required specification, which makes this structural rather than cyclical.

Isaac Levy@isaac_levy

Evidence · 4 cards

The case

Tower Semiconductor: this is a pricing structure, not a cycle

Contract pricing held firm while the commodity tier rolled over. There is no second source at the required specification, which makes this structural rather than cyclical.

The edge

The Street says

Consensus models the cycle turning in the second half
Sell-side target clusters within 8% of spotAuto

I say

The turn already happened in order intake two quarters ago
My number is 14% above the street on the out yearCreator est.

Path to target

Entry: 9637.78Auto
Out-year EPS: +18% vs consensusCreator est.
Exit multiple: 22x, in line with the last cycle peakCreator est.
= Target: 11427.4Creator est.

The kill switch

I'm wrong if

Order intake declines two consecutive quarters
Gross margin below 44% on any printCreator est.
Close below the lock price on above-average volume

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TSEM.TALong

Hit

Entry$9,637.78

Resolved$63,920.00

21d horizon

PositionNo position

Compensation

Certified independent

ViewsThese are the creator's own views

This is research, not financial advice. Calls lock at publish and are graded by the market; they can be and often are wrong. Do your own research and consider your own circumstances before acting.