Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 5 Mar, 25 | ASML | Buy | USD 708.22 | USD 748.0 | USD 786.12 | 29 days | 11.0% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
ASML Holding N.V. develops, produces, markets, sells, and services advanced semiconductor equipment systems for chipmakers. It offers advanced semiconductor equipment systems, including lithography, metrology, and inspection systems. The company also provides extreme ultraviolet lithography systems; and deep ultraviolet lithography systems comprising immersion and dry lithography solutions to manufacture various range of semiconductor nodes and technologies. In addition, it offers metrology and inspection systems, including YieldStar optical metrology systems to assess the quality of patterns on the wafers; and HMI electron beam solutions to locate and analyze individual chip defects. Further, the company provides computational lithography solutions, and lithography systems and control software solutions; and refurbishes and upgrades lithography systems, as well as offers customer support and related services. It operates in Japan, South Korea, Singapore, Taiwan, China, rest of Asia, the Netherlands, rest of Europe, the Middle East, Africa, and the United States. The company was formerly known as ASM Lithography Holding N.V. and changed its name to ASML Holding N.V. in 2001. ASML Holding N.V. was founded in 1984 and is headquartered in Veldhoven, the Netherlands.
Higher Dividend Payout: The company announced a 4.9% increase in its total dividend per share for 2024, reaching €6.40 per ordinary share, demonstrating strong shareholder returns.
Revenue Growth: ASML achieved total net sales of €28.3 billion in 2024, an increase from €27.6 billion in 2023, reflecting strong market demand and higher system sales.
Lower Net Bookings: Total net bookings declined from €20.04 billion in 2023 to €18.9 billion in 2024, suggesting potential future revenue uncertainty and fluctuating customer demand.
Decline in New Lithography System Sales: ASML sold 380 new lithography systems in 2024, a decrease from 421 units in 2023, indicating softer demand or delayed customer investments.
ASML faces key investment risks including potential fluctuations in semiconductor demand, geopolitical tensions affecting supply chains and exports, high R&D and capital expenditures impacting profitability, and reliance on a limited customer base for its advanced lithography systems.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 708.22 | 623.23 | 748.0 | 786.12 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Strong Financial Performance in Q4 and Full Year 2024
ASML Holding NV (ASML) reported record financial results for the fourth quarter of 2024, with total net sales reaching €9.3 billion and a gross margin of 51.7%, surpassing prior guidance. Net income for the quarter amounted to €2.7 billion, reflecting the company's strong operational execution and additional system upgrades. The company's quarterly net bookings reached €7.1 billion, of which €3.0 billion was attributed to Extreme Ultraviolet (EUV) technology. For the full year 2024, ASML achieved total net sales of €28.3 billion, maintaining a gross margin of 51.3% and generating a net income of €7.6 billion.
Outlook for 2025 and Industry Growth Drivers
ASML anticipates first-quarter 2025 total net sales between €7.5 billion and €8.0 billion, with a projected gross margin of 52% to 53%. Research and development (R&D) expenses are expected to be approximately €1.14 billion, while selling, general, and administrative (SG&A) costs are forecasted at around €290 million. For the full year 2025, the company maintains its prior outlook, estimating total net sales between €30 billion and €35 billion, with a gross margin ranging between 51% and 53%. ASML President and CEO Christophe Fouquet highlighted artificial intelligence (AI) as a significant driver of growth in the semiconductor industry, while also acknowledging that shifting market dynamics present both opportunities and risks.
Key Operational Highlights and Market Demand
During Q4 2024, ASML delivered two High Numerical Aperture (High NA) EUV systems and shipped a third to a customer, marking a milestone in advanced semiconductor manufacturing. The company's Installed Base Management sales, which include net service and field option sales, contributed €2.1 billion in the quarter and €6.5 billion for the full year. Despite a year-over-year decline in new lithography system sales from 421 units in 2023 to 380 units in 2024, the company continues to capitalize on long-term demand for its cutting-edge chip manufacturing equipment.
Dividend Growth and Shareholder Returns
ASML announced its intention to declare a total dividend of €6.40 per ordinary share for 2024, representing a 4.9% increase compared to the previous year. An interim dividend of €1.52 per ordinary share will be payable on February 19, 2025, with a final dividend proposal of €1.84 per share to be presented at the General Meeting. However, ASML did not repurchase any shares under its ongoing 2022-2025 share buyback program during the fourth quarter. The company remains committed to returning value to shareholders while balancing investments in future growth and innovation.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on ASML Holding N.V. (NASDAQ: ASML) at the closing market price of USD 708.22, as on March 04, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Technology Industry: Semiconductor Equipment & Materials
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| ASML ASML Holding NV ADR |
13.16 2.00% | 671.14 | 49.01 | 44.05 | 13.98 | 26.27 | 13.85 | 38.25 |
| ASMLF ASML Holding NV |
22.20 3.51% | 653.80 | 35.84 | 34.36 | 10.90 | 22.09 | 10.98 | 30.93 |
| AMAT Applied Materials Inc |
4.48 3.12% | 148.06 | 22.32 | 20.00 | 5.84 | 8.22 | 5.64 | 17.45 |
| KLAC KLA-Tencor Corporation |
22.70 3.45% | 679.81 | 40.82 | 25.71 | 9.52 | 30.25 | 9.80 | 24.77 |
| LRCX Lam Research Corp |
3.70 5.54% | 70.43 | 26.38 | 21.79 | 6.73 | 12.20 | 6.56 | 19.75 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is March 04,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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