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Wednesday, Bernstein analysts reiterated their positive stance on ASML Holding NV (AS:ASML:NA) (NASDAQ: ASML), maintaining an Outperform rating and a price target of €850.00. The semiconductor equipment giant, with a market capitalization of $288.85 billion, has recently experienced a significant 10.87% decline over the past week, according to InvestingPro data. The endorsement follows ASML’s impressive fourth-quarter and full-year 2024 performance, which surpassed expectations due to strong installed base services. The company reported robust quarterly revenues of €9.3 billion, beating the consensus of €9.02 billion and Bernstein’s estimate of €9.09 billion. The gross margin (GM) was notably higher at 51.7%, compared to the guided and consensus figures of 50.6%. This performance aligns with ASML’s consistent profitability metrics, as InvestingPro data shows the company maintains a healthy gross profit margin of 51.15% and trades at a P/E ratio of 39.96x.
ASML’s earnings per share (EPS) also outperformed, coming in at €6.85 against a consensus of €6.67 and Bernstein’s forecast of €6.61. The company’s bookings were particularly strong, totaling €7.1 billion, significantly exceeding the consensus estimate of €3.5 billion. Memory performance remained resilient in the fourth quarter, accounting for 39% of system sales and bookings. This consistency led to a full-year 2024 revenue of €28.3 billion, slightly above the consensus and Bernstein’s projection of €28.1 billion, with a GM of 51.3%.
For the first quarter of 2025, ASML has provided an optimistic sales guidance of €7.75 billion at the midpoint, outpacing the consensus of €7.25 billion and Bernstein’s estimate of €7.11 billion. Currently trading below its Fair Value according to InvestingPro analysis, ASML maintains strong financial health with 18 consecutive years of dividend payments and operates with moderate debt levels. The GM is expected to reach a midpoint of 52.5%, ahead of the consensus of 51.2% and Bernstein’s estimate of 51.9%. The full-year guidance for 2025 remains unchanged at €32.5 billion, with an anticipated GM of 52%.
ASML has indicated a change in reporting, stating that they will cease providing quarterly bookings numbers and will update the backlog annually instead. Despite the robust results and strong bookings, which should provide some reassurance for 2025, Bernstein notes that the potential impact of AI demand shifts due to DeepSeek is not yet clear. China’s contribution to system revenue for 2024 was 27%, bringing the full-year figure to 41%, up from 29% in 2023. ASML expects this to normalize to around 20% of total revenues in 2025.
In summary, ASML’s solid results and strong bookings are seen as reassuring by investors, yet the firm advises caution until the near-term implications of AI demand shifts, influenced by developments like DeepSeek, become clearer. Despite this, Bernstein remains optimistic about ASML’s long-term prospects. For deeper insights into ASML’s financial health, valuation metrics, and growth potential, investors can access the comprehensive Pro Research Report available exclusively on InvestingPro, which covers over 1,400 top stocks with expert analysis and actionable intelligence.
In other recent news, ASML Holding NV has been the focus of various financial adjustments and revised forecasts. Earnings and revenue information have been key highlights. Cantor Fitzgerald maintained its neutral stance on ASML with a $900 price target, expecting ASML to confirm its CY25 target model despite potential order deferrals from Samsung (KS:005930). Bernstein analysts raised their price target for ASML to $887, maintaining an outperform rating, based on solid revenue expectations for 2024. BofA Securities revised ASML’s price target downwards to €803 while maintaining a Buy rating, reflecting a cautious stance towards the company’s future revenue and earnings projections. BNP Paribas (OTC:BNPQY) Exane reinstated coverage on ASML with an Outperform rating and a price target of EUR 817.00. Jefferies increased the price target for ASML stock amid anticipated demand surge for its Extreme Ultraviolet (EUV) lithography systems. These are the recent developments in ASML’s financial trajectory.
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