ASML Holding NV Shows Resilience Amid Order Declines
Stifel Maintains Hold Rating for ASML Holding NV
Stifel has reaffirmed its Hold rating on ASML Holding NV (NASDAQ: ASML), maintaining a price target of EUR 850.00. Their analysis reflects a significant downturn in Q3 orders, which sharply fell to €2.6 billion from €5.6 billion in Q2. Notably, orders for EUV systems saw a decrease from €2.5 billion to €1.4 billion during this period. Logic orders reduced significantly as well, down to €1.2 billion in Q3 from €4.1 billion previously, while memory orders decreased slightly to €1.4 billion compared to €1.5 billion in Q2.
Q4 Projections Provide a Ray of Hope
Despite the order drop, ASML has issued robust guidance for Q4, forecasting sales between €8.8 billion and €9.2 billion, in line with a consensus estimate of €9.0 billion. They anticipate a gross margin ranging between 49% and 50%, which is just below the consensus expectation of 51.4%. This could indicate a modest shortfall in EBIT levels when taking into account operating expenses.
Analysts Offer Diverging Views on ASML's Outlook
In light of the quarterly results, ASML has been under the microscope from various analysts. For instance, Citi retained a Buy rating on ASML, citing underlying trends like accelerated digital transformation and advancements in EUV technology despite the lower Q3 orders and 2025 guidance. Raymond James has also adjusted its price target downward but continues to uphold a Strong Buy rating, evaluating near-term bookings and 2025 financial projections.
Changes from Other Analysts
Morgan Stanley has shifted its position on ASML, moving from an Overweight to an Equalweight rating, slashing its price target on concerns of a possible spending slowdown that could affect earnings growth over the next couple of years. Alternatively, while Deutsche Bank has lowered its price target due to expectations of a 22% decrease in sales to China by 2025, it has maintained its Buy rating. BofA Securities has also adjusted its price target, reflecting lower earnings projections while sustaining a Buy recommendation. In a contrasting move, UBS has downgraded ASML from Buy to Neutral, while Barclays upgraded it from Equal Weight to Overweight.
InvestingPro Insights on ASML
Insights from InvestingPro regarding ASML's recent financial performance and market dynamics paint a broader picture beyond Stifel's analysis. The firm boasts a market capitalization of $286.33 billion, indicating a solid marketplace presence. ASML's P/E ratio stands at 40.29, revealing a willingness among investors to pay a premium for these stocks, indicative of confidence in the company's long-term viability.
Financial Health and Market Positioning
Furthermore, ASML is noted as a key player in the Semiconductors & Semiconductor Equipment sector, highlighting its critical role in EUV system manufacturing. The company has upheld dividend payments consistently for 18 years, showcasing financial stability amidst industry cyclicality. The most recent revenue report posted revenue of $27.26 billion over the last twelve months, complemented by a robust gross profit margin of 51.44%, aligning closely with the anticipated Q4 guidance.
Frequently Asked Questions
What is the current rating on ASML from Stifel?
Stifel maintains a Hold rating on ASML Holding NV with a price target of EUR 850.00.
How did ASML's Q3 orders compare to Q2?
ASML's Q3 orders declined significantly to €2.6 billion from €5.6 billion in Q2.
What are the projections for ASML's Q4 sales?
ASML projects Q4 sales in the range of €8.8 billion to €9.2 billion.
Which analyst maintained a Buy rating despite recent challenges?
Citi has kept a Buy rating on ASML, focusing on trends like digital transformation.
What is ASML’s market position and performance?
ASML has a market capitalization of $286.33 billion and a strong P/E ratio, indicating confidence in its long-term success.
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