RBC: ASML Poised for Price Hikes Amid Multiyear EUV Supply Squeeze; Price Target Up
RBC Capital Markets increased its price target for ASML (ASML.AS), noting that a multiyear supply bottleneck for extreme ultraviolet lithography machines leaves the company well-placed to execute pricing actions. "EUV mix should improve in 2027 as the company ships fewer 3600D units and more E and F variants. ASML is driving meaningful productivity improvements (3800F offers ~13% higher wafers/hr than 3800E tool), which should support higher [average selling prices] and margins. We believe the time is also ripe for management to consider like-for like price increases given strong demand, tight supply, component cost inflation, and record profitability among its Foundry (TSM's GMs up >10pts since 2021) and Memory customers (GMs of ~80% at record highs)," analysts said Monday. On the earnings side, the research firm expects ASML to beat RBC's second-quarter revenue forecast of 8.7 billion euros and its EPS estimate of 6.78 euros and slightly surpass respective consensus expectations of 9 billion euros and 6.89 euros. The semiconductor equipment manufacturer is scheduled to release its second-quarter financial results on Wednesday. "We expect Q3 outlook to be largely in line.
RBC Capital Markets increased its price target for ASML (ASML.AS), noting that a multiyear supply bottleneck for extreme ultraviolet lithography machines leaves the company well-placed to execute pricing actions. "EUV mix should improve in 2027 as the company ships fewer 3600D units and more E and F variants.
ASML is driving meaningful productivity improvements (3800F offers ~13% higher wafers/hr than 3800E tool), which should support higher [average selling prices] and margins.
We believe the time is also ripe for management to consider like-for like price increases given strong demand, tight supply, component cost inflation, and record profitability among its Foundry (TSM's GMs up >10pts since 2021) and Memory customers (GMs of ~80% at record highs)," analysts said Monday.
On the earnings side, the research firm expects ASML to beat RBC's second-quarter revenue forecast of 8.7 billion euros and its EPS estimate of 6.78 euros and slightly surpass respective consensus expectations of 9 billion euros and 6.89 euros.
The semiconductor equipment manufacturer is scheduled to release its second-quarter financial results on Wednesday. "We expect Q3 outlook to be largely in line.