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Investing.com - Freedom Broker downgraded ASML Inc. (NASDAQ:ASML) from Buy to Hold while maintaining a price target of $790.00. The semiconductor equipment giant, with a market capitalization of $284 billion, has seen its stock decline nearly 9% over the past week. InvestingPro data shows 11 analysts have recently revised their earnings expectations downward.
The downgrade follows ASML’s Q2 earnings report, which exceeded expectations but was accompanied by mixed guidance for the third quarter. Despite external risks, management reaffirmed its fiscal year 2025 targets. The company maintains strong fundamentals, with revenue growth of 26.4% and an overall financial health score of "GOOD" according to InvestingPro’s comprehensive analysis.
Freedom Broker noted that ASML’s outlook for fiscal year 2026 remains under pressure from macroeconomic and geopolitical uncertainties. The firm specifically highlighted potential tariffs and export restrictions as factors that could exert significant pressure on ASML’s business.
The research firm revised its FY2026 forecasts downward but expressed confidence that ASML can largely pass any cost increases along the supply chain if tariff changes occur. Freedom Broker identified U.S. trade policy as the key risk for ASML, particularly its potential impact on end-market demand for semiconductors and electronics.
Freedom Broker’s $790 price target is based on a 27x P/E multiple on FY2026 earnings, with the firm viewing the recent sell-off in ASML shares following management’s cautious guidance as a buying opportunity, despite the rating downgrade. Currently trading at a P/E ratio of 26x, InvestingPro’s Fair Value analysis suggests the stock is slightly undervalued, with additional insights available in the comprehensive Pro Research Report.
In other recent news, ASML Holding NV (AS:ASML) has made several announcements that are drawing attention from investors. The company has maintained its full-year guidance for 2025, anticipating a 15% year-over-year growth, although it has adjusted its expectations for EUV unit shipments. Deutsche Bank (ETR:DBKGn) has lowered its price target for ASML to €700, citing concerns over reduced EUV shipments for 2025, particularly due to execution issues at key customers like Intel (NASDAQ:INTC) and Samsung (KS:005930). Similarly, JPMorgan has reduced its price target to EUR822 due to a cautious outlook for fiscal year 2026, with potential impacts on growth estimates.
ASML’s CFO commented on the positive implications of the U.S. easing chip export restrictions to China, which could boost chip demand. However, ASML also faces challenges from ongoing trade disputes, leading to a retraction of its previous growth forecast for 2026. Wolfe Research has reiterated an Outperform rating on ASML, despite trimming its revenue and EPS projections for 2026 due to macroeconomic and geopolitical uncertainties. Additionally, ASML’s outlook for 2025 has been impacted by Samsung’s delay in completing its Texas chip plant, which affects potential equipment sales. These developments reflect the complex environment ASML is navigating in the semiconductor industry.
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