ASML Holding price target raised to €986 by BofA on higher margins

Investing.com - BofA Securities has raised its price target on ASML Holding NV (AS:ASML) (NASDAQ:ASML) to €986 from €941 while maintaining a Buy rating on the semiconductor equipment manufacturer. The stock, currently trading near $999.53 with a market capitalization of $388.63 billion, has shown remarkable strength with a 44.61% gain over the past six months. According to InvestingPro analysis, ASML currently appears to be trading near its Fair Value.

The adjustment reflects BofA’s increased earnings estimates for calendar years 2025 and 2026, up by 2.8% and 5.5% respectively, driven by higher gross margins, lower operating expenses, and increased extreme ultraviolet (EUV) lithography system deliveries expected in 2026.

BofA projects strong revenue growth of 17% year-over-year for ASML in 2027, following what it describes as a "largely tepid" 2026 with 3.3% growth, up from its previous estimate of a 0.6% decline.

The firm attributes the anticipated 2027 growth to new foundry fabrication plants opening in the United States by TSMC and Samsung, along with EUV upgrades in DRAM production at Samsung, SK Hynix, and to a lesser extent, Micron.

BofA’s new price target is based on a 24x EV/EBITDA multiple for calendar year 2027, increased from the previous 23x multiple, which the firm justifies by citing ASML’s diversifying customer base and improved visibility for 2026 and 2027 performance.

In other recent news, ASML Holding NV reported strong financial performance for the third quarter of 2025, with net sales reaching €7.5 billion. This growth was driven by robust demand for its lithography technology, particularly amid the ongoing push in artificial intelligence. BofA Securities has reiterated its Buy rating for ASML and raised the stock price target to $1,134.00 from $1,082.00. This adjustment comes in light of increased earnings per share estimates for 2025 and 2026, attributed to higher gross margins and increased EUV deliveries.

ASML’s Chief Financial Officer, Roger Dassen, addressed concerns regarding a projected decline in sales to China, clarifying that it is not due to previous stockpiling by Chinese customers. The company’s earnings per share forecast was set at 6.37 USD, although the actual results were not disclosed in the recent earnings call transcript. These developments highlight the company’s strategic adjustments and market responses in the current economic climate.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.