On Monday, BofA Securities adjusted its outlook on shares of ASML Holding NV (AS:ASML:NA) (NASDAQ: ASML), a key player in the semiconductor equipment industry. The firm's analyst revised the price target downwards to €803 from the previous €870 while reiterating a Buy rating on the stock.
The change reflects a cautious stance towards ASML's future revenue and earnings projections. According to InvestingPro data, five analysts have recently revised their earnings estimates downward, with current analyst targets ranging from $671 to $1,141. The stock currently trades near $718, suggesting potential upside based on the consensus target.
The revised price target comes after a detailed analysis of the global wafer fabrication equipment (WFE) market and ASML's guidance. The analyst lowered the calendar year 2025 earnings (CY25E) revenue estimate for ASML from €32.5 billion to €30.9 billion, which is at the lower end of the company's own forecast range of €30-35 billion.
Moreover, the earnings per share (EPS) estimate was trimmed from €24 to €22.3, placing these projections 2-3% below the consensus. InvestingPro's comprehensive analysis shows ASML maintains strong fundamentals with a 51% gross profit margin and healthy returns, including a 17.5% return on assets.
The primary driver behind the revision is Intel (NASDAQ:INTC)'s new strategic direction, as indicated by its CEO, emphasizing capital efficiency. Consequently, the analyst reduced the forecast for the number of Extreme Ultraviolet (EUV) low numerical aperture (NA) units from 47 to 43 and also applied a 5% cut to Deep Ultraviolet (DUV) related tool revenues.
The analyst's new forecast for ASML's equipment revenue growth in CY25E is +7.8%, aligning with the updated WFE market growth estimate of +5%.
Excluding revenues from high-NA equipment, which are largely associated with customers' research and development activities, ASML's equipment revenue growth is expected to be a modest +0.7% year-over-year.
The price objective (PO) reduction to €803 (equivalent to $851) from €870 ($939) is based on the same 23x calendar year 2026 earnings before interest, taxes, depreciation, and amortization (CY26E EV/EBITDA) multiple, which is within ASML's historical range of 17.5x to 35x and slightly above its median of 22x given the anticipated depressed earnings.
Despite the adjustments, the firm maintains its Buy rating, anticipating an inflection in CY26E. InvestingPro analysis reveals ASML's strong financial health with moderate debt levels and 18 consecutive years of dividend payments, though it currently trades at premium multiples across various metrics. For deeper insights into ASML's valuation and growth prospects, investors can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, ASML Holding NV has witnessed numerous financial adjustments and revised forecasts. BNP Paribas (OTC:BNPQY) Exane reinstated coverage on ASML, setting an Outperform rating and emphasizing the company's strong position in the semiconductor industry. Jefferies also maintained a positive stance, increasing the price target for ASML stock amid anticipated demand surge for its Extreme Ultraviolet (EUV) lithography systems.
Cantor Fitzgerald reaffirmed its Overweight rating on ASML shares, highlighting the upcoming Capital Markets Day and expressing confidence in ASML's 2025 financial targets. However, Erste Group revised its rating from "Buy" to "Hold" after ASML released its third-quarter report which showed a substantial decline in new orders and a downward adjustment of its 2025 revenue forecast.
Bernstein SocGen Group also adjusted its stance on ASML, reducing its price target but maintaining an Outperform rating. Despite the current market visibility, the firm anticipates a recovery for ASML in 2026. These are the recent developments in ASML's financial trajectory.
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