ASM Earnings: Management Raises Guidance; Increasing Our Fair Value Estimate to EUR 520

Narrow-moat ASM International's first-quarter results were at the top of its guided range at EUR 639 million in sales, with management raising its guidance for the second quarter and full year. They now expect revenue of EUR 670 million-EUR 700 million next quarter, compared with EUR 600 million-EUR 640 million previously, with second-half sales growing around 10% compared with the first half. We are increasing our fair value estimate to EUR 520 per share from EUR 480 to account for slightly higher medium- and long-term forecasts. We assume 8% revenue growth in 2024 to EUR 2.85 billion, in line with guidance. Meanwhile, we expect ASM's results to be slightly above the midpoint of guidance for 2025 and 2027, with revenue of EUR 3.5 billion and EUR 4.7 billion respectively. Our fair value estimate represents a forward price/earnings ratio of 42 times for 2024 and 32 times for 2025. Shares remain 13% overvalued as of April 24 after an 11% increase in early trading driven by the good results.