On Wednesday, TD Cowen reaffirmed its Buy rating on shares of Ashares SML Holding NV (ASML:NA) (NASDAQ: ASML) with a steady price target of EUR 1,050.00. The firm’s analysis highlighted that ASML’s June 2024 revenue and earnings per share (EPS) surpassed the consensus estimates. However, the outlook for the September quarter was not as optimistic, falling short of expectations.
ASML reported revenue and EPS of EUR 6.2 billion and EUR 4.01, respectively, for June 2024, which outperformed the Street’s projections. Despite the weaker forecast for the following quarter, the company’s bookings were encouraging at EUR 5.6 billion. This figure suggests a positive reception of orders for TSMC’s 2nm technology.
The company’s Extreme Ultraviolet (EUV) orders amounted to EUR 2.5 billion in the second quarter, and TD Cowen anticipates that the High-NA EUV technology will become a significant factor from calendar year 2025 onwards. However, the firm also noted that ASML’s business dealings in China could be affected by ongoing geopolitical tensions.
Looking ahead, TD Cowen projects revenue and EPS for ASML in calendar year 2025 to reach EUR 36.0 billion and EUR 28.60, respectively. The firm’s reiterated Buy rating and price target reflect confidence in the company’s financial prospects despite the potential risks associated with its market in China.
In other recent news, ASML Holding NV (AS:) has been the subject of several key developments. Despite a slight miss in its third-quarter revenue guidance, Wolfe Research maintained an Outperform rating on the company. The firm noted that the shortfall was due to timing issues and projected a significant revenue improvement in the second half of 2024.
ASML’s second-quarter bookings and full-year 2024 guidance indicate a strong performance in the coming years. The company’s second-quarter orders were driven by memory DUV, and there’s anticipation for TSMC’s N2 EUV orders in the latter half of 2024.
Meanwhile, concerns have arisen over potential additional restrictions from the U.S. government on services related to restricted tools in China. However, Wolfe Research advises that these concerns should not significantly impact ASML’s financial outlook, as services in China represent a small portion of the company’s revenue.
Cantor also expressed a positive outlook for ASML, anticipating a potential modest beat in the upcoming earnings report. The firm emphasized the importance of the company’s bookings, indicating that approximately €4 billion per quarter is required to meet the mid-point of their CY25 target model.
ASML’s shares recently reached an all-time high, driven by growing optimism about the prospects of its top customer, Taiwan Semiconductor Manufacturing Company (TSMC). The company is poised for a robust order book amid a surge in demand for AI chips. These are the recent developments surrounding ASML.
InvestingPro Insights
In the wake of TD Cowen’s analysis, current metrics from InvestingPro provide a deeper financial perspective on ASML Holding NV. With a robust market capitalization of $373.72 billion and a high P/E ratio of 48.26, ASML stands out as a prominent player in the Semiconductors & Semiconductor Equipment industry. This high P/E ratio, particularly when compared to near-term earnings growth with a PEG ratio of 13.76, indicates that investors are willing to pay a premium for the company’s earnings potential.
The company’s financial health is further underscored by a solid gross profit margin of 51.41% over the last twelve months as of Q1 2023, reflecting efficient operations and strong pricing power. Additionally, ASML has shown a commitment to shareholder returns, maintaining dividend payments for 18 consecutive years, despite a recent dividend growth decline of -19.18%. The latest data also shows an impressive one-year price total return of 42.62%, highlighting the company’s rewarding investment over the past year.
For investors seeking comprehensive analysis and additional insights, there are over 15 InvestingPro Tips available for ASML, which can be accessed through the platform. These tips provide valuable information on the company’s financials, valuation, and market performance. To explore these insights further, consider using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription at InvestingPro.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.