ASML Raises 2025 Revenue Target at Investor Day, Led by Greater EUV Penetration; Shares Attractive

On Nov. 11, ASML hosted an investor day during which management outlined its outlook for the wide-moat lithography leader. The firm focused on its strategies and investments to enable advances in semiconductor scaling via more advanced extreme ultraviolet lithography; it also provided an updated financial model. Management now expects 2025 revenue to be EUR 30 billion-EUR 40 billion, up from its EUR 24 billion-EUR 30 billion outlook presented at last year’s investor day. This revenue forecast is consistent with our internal model, and thus we are maintaining our $700/EUR 700 fair value estimate. While the shares are up more than 40% over the past month, we still believe they look undervalued at current levels, as we expect demand for ASML’s EUV tools will prove more resilient to a downturn in the semiconductor market in 2023.