Shares in ASML (ASML) extended losses by 4% on Wednesday following a 16% decline on Tuesday, after the firm prematurely released third-quarter results showing a slowdown in orders and a reduction to 2025 net sales guidance. Globally, semiconductor stocks fell on Tuesday, with bellwether Nvidia (NVDA) losing nearly 5%.
Orders at the semiconductor equipment maker came in at EUR 2.63 billion, down from EUR 5.57 billion recorded in the second quarter this year. Morningstar analyst Javier Correonero, in his preview on the results, had cited around EUR 4 billion as an order level needed to meet the midpoint of ASML’s 2025 guidance of EUR 30 to EUR 40 billion for 2025.
Correonero cut the fair value estimate to EUR 850 to reflect the weaker guidance revealed on Oct. 16.
ASML CEO Christophe Fouquet said: “While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover. It now appears the recovery is more gradual than previously expected. This is expected to continue in 2025, which is leading to customer cautiousness.”
Key Morningstar Metrics for ASML Stock
• Fair Value Estimate: EUR 850
• Morningstar Rating: ★★★★
• Economic Moat: Wide
• Morningstar Uncertainty Rating: High
ASML Third-Quarter Orders Weak
Morningstar analyst Javier Correonero said on Oct. 16:
“ASML’s shares declined 14% as the firm accidentally published its third-quarter results one day ahead of schedule. ASML lowered its 2025 revenue guidance and now expects revenue to be in the EUR 30 billion to EUR 35 billion range. Although this falls inside management’s EUR 30 billion to EUR 40 billion target set at the 2022 investor day, we expected 2025 revenue to be in the midpoint of the guided range, as management commentary in the past two quarters pointed toward reaching that goal. 2025 gross margins will also be weaker, in the 51% to 53% range, compared with management’s previous target of 54% to 56%, due to lower sales and postponement of some EUV orders. China should moderate to around 20% of group revenue in 2025, which we expected.
“Third-quarter orders were weak, which mostly explains the weak 2025 guide, and came in at EUR 2.6 billion versus expectations of EUR 5 billion. Logic foundries are ramping up new nodes at a slower pace than expected, and ASML is seeing little capacity additions in memory so far. We believe Intel is at the heart of ASML’s weaker outlook, as it recently postponed the opening of its Magdeburg fab, and more delays and issues could keep coming. In September, Samsung issued an apology letter to investors for its recent technological underperformance, so we believe both firms might have a more cautious 2025 perspective. In the memory market, capacity additions—aside from high-bandwidth memory needed for AI buildout—remain weak.
“We cut our fair value estimate to EUR 850 from EUR 900 per share, as we reduce our 2025 and 2030 forecasts. We now assume EUR 32.1 billion in revenue in 2025, versus EUR 36 billion previously, and EUR 54.1 billion in 2030, compared with EUR 58.4 previously. In our view, ASML is a good buying opportunity after this pullback, and the current share price is discounting a too pessimistic long-term scenario. At the EUR 668 closing price, ASML is trading at a 28.5 times forward 2025 PE ratio based on our estimates.”
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