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On Friday, HSBC analyst Adithya Metuku upgraded ASM International NV (AS:ASMI) ( Euronext (EPA:ENX) Amsterdam:ASM) stock rating from Hold to Buy, despite lowering the price target from EUR640.00 to EUR560.00. The upgrade follows ASM International’s first-quarter 2025 results, which prompted HSBC to revise its estimates and anticipate a significant drop in consensus estimates.
ASM International’s share price has experienced a substantial decline, falling over 40% from its peak in July 2024. Year-to-date, the stock has decreased by 24%, lagging behind its peer ASML (AS:ASML) and the SOX index by 12% and 11%, respectively. The current valuation of ASM International at FY26/27e EV/EBIT of 18.6x/15.7x is now below the historical five-year average forward 12M EV/EBIT multiple of 25.1x.
Metuku noted that ASM is seen as a structural beneficiary of the shift to gate-all-around (GAA) nodes, but high expectations and valuation previously justified a neutral stance. The recent price decline and updated financial metrics have changed the firm’s view on the stock’s potential.
Despite the reduced price target, HSBC’s upgrade signals a positive outlook for ASM International’s future performance. The analyst cited potential improvements in orders throughout the year, driven by leading-edge node ramps, as a factor that could enhance investor sentiment.
The analyst also acknowledged the likelihood of short-term uncertainties contributing to market volatility, but emphasized the expectation of a recovery in orders as the year progresses, which could bolster investor confidence in ASM International.
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