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On Wednesday, TD Cowen reiterated its Buy rating on ASML Holding NV (AS:ASML:NA) (NASDAQ: ASML) shares, maintaining the price target of EUR 825.00. According to InvestingPro data, analysts maintain a strong bullish consensus with price targets ranging from $751 to $1,200, suggesting significant upside potential. The stock currently trades at $647.55, and InvestingPro analysis indicates the stock is currently undervalued based on its Fair Value model. Analysts at the firm highlighted ASML’s first-quarter revenue that aligned with market expectations and an earnings per share (EPS) that surpassed forecasts due to higher gross margins. Despite a significant quarterly drop in bookings, with extreme ultraviolet (EUV) bookings falling 60% from the previous quarter, TD Cowen’s outlook for the company remains unchanged for calendar years 2025 and 2026.
ASML reported March 2025 quarterly revenue of EUR 7.7 billion, a gross margin of 54.0%, and an EPS of EUR 6.00. These figures compare favorably to the consensus estimates, which anticipated revenues of EUR 7.8 billion, a gross margin of 52.2%, and an EPS of EUR 5.74. InvestingPro data shows the company maintains strong financial health with an overall score of "GOOD," supported by robust profitability metrics and cash flows that adequately cover debt obligations. The bookings for the quarter decreased to EUR 3.9 billion, a 44% drop from the robust EUR 7.1 billion recorded in the last quarter of 2024. However, the EUV bookings at EUR 1.2 billion were slightly better than TD Cowen’s previous forecast.
The company’s sales in China, which accounted for 27% of the total, saw a decrease of 19% quarter-over-quarter and 20% year-over-year when measured in dollars. Despite these challenges, InvestingPro analysis reveals ASML maintains strong fundamentals with a 51.28% gross profit margin and healthy returns on equity of 47%. For deeper insights into ASML’s performance and future prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers. The impact of tariffs on ASML’s business is still being evaluated by the company. Despite these challenges, the firm’s outlook for the current year remains achievable, and 2026 is still expected to be a year of growth for ASML.
For the first quarter, ASML’s service revenues experienced a slight decline from the previous quarter, amounting to approximately EUR 2.0 billion. The service revenue is anticipated to remain relatively flat in the second quarter. The unchanged outlook for the coming years suggests that ASML is navigating through the current economic uncertainties with a degree of resilience.
In other recent news, ASML Holding NV reported first-quarter revenues of €7.74 billion, slightly below market expectations by 0.4%. The company’s orders also fell short, totaling €3.9 billion compared to the anticipated €4.8 billion. Despite these figures, ASML maintained its revenue forecast for 2025, projecting between €30-35 billion, with further growth expected in 2026. Analysts from Evercore ISI, Citi, TD Cowen, and BofA Securities have maintained positive ratings on ASML, reflecting confidence in its long-term prospects despite current challenges.
Evercore ISI and Citi both highlighted ASML’s valuation and technological advancements, including progress in Extreme Ultraviolet (EUV) systems. BofA Securities noted a slight increase in expected shipments of EUV systems, while TD Cowen emphasized ASML’s strategic position in the semiconductor industry. The company faces tariff-related headwinds, impacting its gross margin outlook by approximately 100 basis points.
These developments come amid broader market concerns related to tariffs imposed by the U.S. and retaliatory measures from China, which have affected semiconductor stocks globally. Despite these challenges, analysts suggest that ASML’s advanced technology offerings and strategic market position could support its future growth.
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