Ahead of the earnings report on July 15.
On Monday, RBC Capital raised its price target for ASML Inc. (NASDAQ:ASML) from $1,700 to $2,000 and maintained its “Buy” rating.
The stock is currently trading at $1,726, up 115% over the past year. However, analyses suggest that the stock is overvalued relative to its estimated fair value.
The company stated that demand for EUV lasers has improved since the last quarterly report, but that near-term growth potential is expected to be limited given the long lead times.
RBC Capital expects a more significant improvement in EUV shipments by 2027, to nearly 90 units (excluding Alaska and Hawaii), up from over 80 previously.
The analyst cited robust investment in AI technologies, tight DRAM availability, and increasing competition among leading contract manufacturers as drivers of strong EUV demand.
EUV is becoming a bottleneck, and the company said it is unlikely that the supply situation will ease over the next two to three years.
RBC Capital highlighted the record profitability of ASML’s customers and stated that the market environment is ideal for price adjustments that could accelerate revenue and margin growth.
The firm is convinced that positive market trends in terms of unit volumes and product mix are sufficient to further boost the company’s above-average performance.
The analyst noted that a potential acquisition of Terafab could further improve the company’s future prospects. According to Tips, ASML remains a major player in the semiconductor and semiconductor equipment industries.
In other recent news, there has been significant activity related to ASML’s financial outlook and operational strategies.
Bernstein raised its price target for ASML to $2,623, citing increased demand driven by expansion in the field of artificial intelligence.
This has also led to higher revenue forecasts and expectations regarding the growth of EUV shipments in the coming years. Meanwhile, BofA Securities reaffirmed its “Buy” rating with a price target of $2,268and highlighted ASML’s forecast for 2030, which projects potential revenue of between 44 and 60 billion euros with gross margins of 56 to 60 percent.