On Thursday, BofA Securities maintained a positive outlook on ASML Holding NV (LON:0QB8) (AS:ASML:NA) (NASDAQ: ASML) stock, reasserting a Buy rating and a price target of €870.00. The firm's confidence was bolstered by ASML's reaffirmation of its 2030 financial targets ahead of its Capital Markets Day (CMD).
ASML's press release, issued prior to the CMD, reiterated the company's revenue forecast for 2030, which is expected to range between €44 billion and €60 billion, with a gross margin (GM) of 56% to 60%.
ASML also confirmed its commitment to returning a substantial amount of cash to shareholders through dividends and buybacks. The company's outlook is underpinned by the anticipation of robust demand in the semiconductor industry, which is projected to exceed $1 trillion by 2030, driven largely by advancements in artificial intelligence (AI).
While ASML did not reiterate other financial metrics such as operating expenses (OPEX) and capital expenditures (CAPEX), the analyst from BofA Securities expressed belief that these figures are likely to remain consistent with previous forecasts. The firm's decision to maintain the '2030' label on their guidance was seen as a positive signal, reinforcing the analyst's stance on the stock.
The confirmation of ASML's long-term financial goals suggests a steady course for the company, which specializes in the manufacture of photolithography systems used in semiconductor production.
As a key supplier to the global semiconductor industry, ASML's performance and outlook are crucial indicators of the sector's health and future prospects. The company's strategic focus on dividends and buybacks reflects a shareholder-friendly approach amidst a favorable industry outlook.
In other recent news, ASML Holding NV has been the focus of numerous financial adjustments and revised forecasts. The semiconductor company's third-quarter report revealed a significant decrease in new orders, leading to a downward adjustment of its 2025 revenue forecast. Erste Group subsequently downgraded ASML's stock rating from "Buy" to "Hold."
Analysts from Bernstein SocGen Group and Citi also adjusted their stance on ASML, reducing their price targets while maintaining positive ratings. Despite these changes, the company's CEO, Christophe Fouquet, projects growth in 2026.
ASML's revised 2025 revenue forecast is due to a slower recovery in traditional markets and normalization of China sales. The company's Q3 2024 results revealed total net sales of €7.5 billion and a gross margin of 50.8%. Projections for Q4 2024 net sales are estimated to be between €8.8 billion and €9.2 billion.
Despite these challenges, several analysts from firms such as JPMorgan (NYSE:JPM) and BofA Securities express confidence in ASML's ability to navigate these changes, anticipating growth in non-China deep ultraviolet revenues and expecting extreme ultraviolet revenues to increase by 41% next year. These projections and adjustments reflect the dynamic nature of the semiconductor industry and the various factors influencing ASML's financial performance.
InvestingPro Insights
ASML's reaffirmation of its 2030 financial targets aligns with several key metrics and insights from InvestingPro. The company's strong market position is reflected in its substantial market capitalization of $260.36 billion. Despite recent market volatility, with the stock trading near its 52-week low and experiencing a 22.65% decline over the past month, ASML's fundamentals remain robust.
InvestingPro data shows that ASML maintains a healthy gross profit margin of 51.15% and an operating income margin of 30.72% for the last twelve months, indicating efficient operations and strong pricing power. These figures support the company's ambitious 2030 gross margin targets of 56% to 60%.
Two relevant InvestingPro Tips highlight ASML's strengths: the company has maintained dividend payments for 18 consecutive years, and it's a prominent player in the Semiconductors & Semiconductor Equipment industry. These factors underscore ASML's commitment to shareholder returns and its pivotal role in the semiconductor sector's growth, which aligns with the company's positive long-term outlook.
For investors seeking a deeper understanding of ASML's potential, InvestingPro offers 13 additional tips, providing a comprehensive analysis of the company's financial health and market position.
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