ASML stock target cut at BofA on macro and tariff uncertainties

Investing.com -- Bank of America lowered its price target for ASML Holding N.V., citing macroeconomic and tariff-related uncertainties that could weigh on the semiconductor equipment maker’s near-term bookings.

BofA cut its Q3 and Q4 booking estimates to €3.5 billion and €3.8 billion, respectively, down from €4.6 billion and €5.4 billion.

“We think the lack of details around semiconductor tariffs as well as a weakening China WFE are delaying ordering decisions,” BofA said.

While customer wins at Samsung and Intel’s recent equity funding are encouraging, the note added that “the challenges facing these customers remain daunting.”

The analysts also noted that strong AI capital expenditure has yet to fully translate into wafer fab equipment (WFE) orders, due to re-use of capacity for AI logic chips and uncertainty around high-bandwidth memory allocation.

Reflecting these headwinds, BofA reduced its price target from €755 to €724, rolling forward from CY26E to CY27E and applying a 20x EV/EBITDA multiple, down from 23x previously.

Despite the cut, the firm reiterated a Buy rating, citing “attractive valuations and resilient lithography intensity.”

BofA now models CY26 sales slightly lower, projecting a 0.6% year-on-year decline driven by reduced low-NA EUV deliveries and weaker China revenues.

The bank expects growth to rebound in CY27, fueled by new U.S. fab openings.

Lithography intensity remains a key positive, BofA said, noting it is expected to rise to 28% this year from 25% in 2024.

The increase is supported by “EUV adoption in DRAM, China, a resumption of EUV tool purchase by TSMC, and a weaker U.S. dollar.”

ASML’s roadmap, the note added, should allow Foundry and DRAM customers to reduce transistor costs while maintaining high litho intensity through 2030.

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