ASML Inc. (ASML) PT Raised to $887 at Bernstein SocGen Group

Bernstein SocGen Group analyst Sara Russo raised the price target on ASML Inc. (NASDAQ: ASML) to $887.00 (from $767.00) while maintaining a Outperform rating.

The analyst comments "While ASML’s Q4 and 2024 results are expected to come in mostly in line with guidance from 15 months ago, investors are likely to be far more interested in what lies ahead for 2025 and beyond...with the spotlight on bookings and guidance. We expect solid Q4 and FY24 revenue, driven by strong EUV growth and persisting China demand. We also expect resilience on margins, which would deliver EUR 19 on EPS, down just under 5% YoY. Despite a challenging year in terms of expectations for 2025, this would be in line with ASML’s 2024 ‘transition year’ guidance from October 2023 on both top and bottom line. To meet our 2025 estimates, we find ASML still needs ~4B of bookings—just under EUR ~2B for EUV and ~2B of non-EUV. Consensus bookings expectations for EUR 3.5B in Q4 are appropriately tempered, but estimates pick up strongly throughout 2025. We see EUR ~6B of bookings as the magic number we need to see on average over the next 4/5 quarters to give us confidence on our 2025 estimates and trajectory into 2026. We may be starting to see the normalisation of China system sales that ASML has flagged for 2025. Our December China WFE imports analysis indicates a 3% YoY rise in Q4 China systems revenues, but an 18% drop sequentially. This would put China at 32% of systems sales for Q4—below the ~50% we have seen the last three quarters, but not yet dropping to the 20% of total revenue guide for 2025. We expect ASML to maintain 2025 guide, although we continue to see some risk and remain slightly below in our estimates—albeit less than we were a few months ago with tailwinds from China and TSMC capex. We top up our Q424 sales estimates based on China. This combined with TSMC’s higher-than-anticipated Capex guide lead us to revise up our FY25 revenue, as well as 2026. With investors starting to look beyond 2025, we shift our valuation to 2026. We lower our P/E from 32x 2025 EPS to 28x 2026 EPS of 29.1EUR, raising our TP to 850 EUR. Lower P/E accounts for the 2-yr fwd earnings in 2026 vs. 2025."

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