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[UPDATED EARNINGS REVIEW] ASML NA reports stellar results, impressing sell-side analysts; JPM expects the Dutch company to close the valuation gap with US peers

Newsquawk Staff ·

Analyst Commentary

  • JPMorgan suggested that ASML’s plans to raise lithography equipment output by about 30% in 2027 and again in 2028, implied that 2028 FY EPS could be greater than EUR 65 (vs expectations of c. EUR 61/shr).
  • JPM also noted that the results will help push back on bearish narratives that ASML is dealing with limited-capacity. They see the co. closing its valuation gap vs US players.
  • Citi suggested that ASML delivered an “unexpectedly” large increase to its FY outlook. On the supply front, analysts write that the 2027 plans to boost output is a touch below expectations (c. 85 vs exp. 90-100), whilst 2028 matched the upper end of expectations (110).
  • The analysts conclude by writing that “ASML are willing to provide the market with clear bottoms up guidance two years out, something that we think should be viewed positively”.
  • Bank of America and Morgan Stanley both maintained their “Buy” and “Overweight” ratings on the company, with a PT of EUR 2,022/shr and EUR 1,830/shr, respectively.

Earnings Review

  • Overall, strong metrics from the Dutch semiconductor maker; it beat on top- and bottom-lines, with Gross Profit Margin and Net Income also topping analyst expectations.
  • Heading into the results, there was broad optimism surrounding the headline results themselves, given the recent AI-driven memory/chip upcycle. As such, there was perhaps more focus on the accompanying FY guidance and commentary.
  • On that note, the Co. lifted FY revenue and gross margin well above expectations, and Q3 guidance also impressed. CEO Fouquet also provided upbeat commentary where he stated that AI-related investments are driving demand, adding that order intake remained "extremely strong" in H1. On the supply front, he suggested that there are plans to add 30% to its 2026 NAV EUV capacity, with aims to boost it further in the coming years.
  • Also driving the optimism is news that Intel has decided to use ASML equipment for its Panther Lake laptop chips.

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