ASML stock forecast today
$943.83
Moderate purchase
Based on 15 analyst ratings
| High expectations | $1,148.00 |
|---|---|
| Average expectations | $943.83 |
| Low expectations | $767.00 |
ASML stock forecast details
ASML Holdings NV Nasdaq: ASMLThe semiconductor giant that specializes in advanced equipment systems may be starting to attract the attention of savvy investors. Despite higher estimates in the last two quarters, the $280 billion company is in correction territory, down 35% from its 52-week high and 5.61% year to date. Although the recent decline may seem alarming, it may represent a compelling value opportunity in an industry that is thriving despite short-term setbacks. With analysts maintaining optimistic price targets, now may be the perfect time to look at ASML ahead of the new year.
The largest technology company you may not know
Headquartered in the Netherlands, ASML is one of Europe’s largest technology companies and arguably one of the most influential companies in the semiconductor supply chain. While it doesn’t have the same name recognition as NVIDIA Nasdaq: NVDA Or advanced micro devices Nasdaq: AMDAdvanced lithography equipment plays a vital role in modern semiconductor manufacturing.
ASML is the sole producer of extreme ultraviolet (EUV) lithography machines, a technology essential for creating the microchips that support AI, smartphone and data center developments. Without ASML equipment, the technology world would lack the tools needed for its rapid advancement. This unique position makes ASML indispensable to the semiconductor industry, effectively maintaining its monopoly position.
Recent weakness after strong results
ASML’s third-quarter earnings report initially looked positive, beating estimates for the company’s revenue and earnings per share. However, these results were overshadowed by weak guidance, sending the stock down nearly 20% in the following days.
The company now expects its 2024 revenue to be between €30 billion and €40 billion, a 7% drop in the middle compared to previous estimates. Future revenue, measured by bookings, fell below expectations at $2.8 billion, 53% below expectations. The shortage reflects weak demand for broader semiconductors, with delays in logic chip orders and limited expansion of memory chip capacity.
However, ASML’s management emphasized that its long-term growth potential remains intact, describing these challenges as temporary setbacks.
Potential value play
At first glance, ASML’s current P/E ratio of 37.45 may seem expensive, but its forward P/E ratio of 28.21 indicates a more attractive valuation compared to potential future earnings. The forward P/E now lies below its 10-year average, suggesting the stock may be undervalued.
Technically, ASML is trying to stabilize after finding support at near $640. The stock is forming a higher bottom, with the 50-day and 20-day moving averages converging, which could indicate a bottom.
From a broader valuation perspective, ASML’s price-to-sales (P/S) ratio of 9.88 and current ratio of 1.55 also indicate financial health and liquidity, leaving it well-positioned for a recovery once market sentiment changes.
Analysts remain bullish
ASML Holding (ASML) price chart for Monday, December 16, 2024
Despite the recent headwinds, Wall Street is still seeing a big rally in ASML stock. Based on fifteen analyst reviews, the stock has a Moderate Buy rating, with an average price target of $943.83, indicating a potential upside of 32% from current levels. BNP Paribas recently initiated coverage with an Outperform rating and a price target of $858, reflecting strong confidence in the company’s fundamentals.
ASML’s recent correction has undoubtedly shaken investor confidence, but its essential role in the semiconductor industry, coupled with its historically low valuation, makes it an interesting value. With analysts continuing to support the stock with high price targets, investors may find this pullback a good moment to pick up ASML shares before the new year brings a potential rebound.
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