Barclays Lifts ASML Price Target to €2,400
Barclays analyst Simon Coles raised the price target on ASML Holding NV (ASML:NA) (NASDAQ: ASML) to EUR2,400 (from EUR2,000) while maintaining an Overweight rating.
“ASML gave new capacity targets which we think should really be seen as a reflection of current demand (ordered or indicated).
We do not see the targets as ceilings and expect positive updates later in the year. On pricing, ASML is sticking to a value based framework which we view as sensible, but new commentary around the current environment giving flexibility on pricing gives hope that ASML could extract more value from its next generation of tools.
We model EUV ASPs improving in 2H26, further in 2027 and accelerating in 2028 as price actions take affect.
We increase our price assumption for the 3800F tool, which will start shipping in 2H27, to €300m (€290m before) and there could be upside here.
Gross margins were the major positive this quarter, in our view, with a material step up.
Part is recovery of China DUV after light 1H, part is improving EUV low NA ASPs and part is strong upgrades business with improving services.
We think the first two can continue to support gross margins into 2027.
On services and upgrades, we estimate EUV service revenue could increase c€1bn in 2027 but at low 50s gross margin will be a small drag.
For now we assume upgrade activity continues at similar levels into 2027 but this can be volatile.
As a result we model modest GM expansion of 20bps in 2027.
Meaningful expansion should follow in 2028 driven by volumes, mix and further improvement in EUV gross margins (due to higher ASPs).”
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