Goldman Sachs Reaffirms Buy Rating on ASML Holding NV, Expects Strong Growth in 2025
Goldman Sachs has reiterated its Buy rating on ASML Holding NV, a leading provider of lithography systems for the semiconductor industry. The financial firm set a price target of EUR980.00, expressing confidence in the company’s future prospects.
Goldman Sachs cited ASML’s impressive fourth-quarter order intake as one of the key reasons for their positive outlook. The company has also received favorable feedback from industry peers and customers, indicating strong demand in the end-market. These factors are expected to drive ASML’s growth, particularly in 2025.
Since its earnings report on January 24, 2024, ASML’s stock has risen by 19% in USD. Despite this surge, Goldman Sachs notes that ASML has slightly underperformed its semiconductor capital equipment competitors in the last 12 months. This suggests potential for further growth, according to the firm’s analysis.
Looking at ASML’s valuation, the company is currently trading at 28 times its projected 2025 earnings per share, representing a 42% premium over the European Tech sector. However, ASML is expected to achieve a compound annual growth rate in revenue that is approximately 75% higher from 2023 to 2026. Furthermore, ASML is estimated to have a 25% higher EBITDA margin for the calendar year 2024 compared to its peers.
Goldman Sachs highlights that ASML’s current valuation may not fully reflect the company’s near-term prospects and the anticipated surge in Artificial Intelligence (AI) demand across various end markets. ASML is expected to benefit from increased spending on General AI and advancements in technology. Additionally, the firm emphasizes ASML’s significant competitive advantage in Extreme Ultraviolet technology. The introduction of High Numerical Aperture tools is expected to bolster ASML’s revenue growth in the later part of the decade.
Overall, Goldman Sachs’ reaffirmation of the Buy rating and optimistic price target on ASML signals strong confidence in the company’s future performance. Investors will be keeping a close eye on ASML as it continues to seize opportunities in the growing semiconductor industry and capitalize on the demand for advanced technologies.
Analyst comment
Positive news. As an analyst, I expect ASML’s market to continue to grow, driven by strong demand in the semiconductor industry and the company’s competitive advantages in AI and Extreme Ultraviolet technology. Investors should closely monitor ASML’s performance as it capitalizes on opportunities in the industry.
