On Thursday, TD (TSX:TD) Cowen adjusted its price target for ASML Holding NV (AS:ASML:NA) (NASDAQ: ASML) to EUR825.00, a decrease from the previous target of EUR1,050.00. Despite the reduction, the firm maintained its Buy rating on the stock. The adjustment came after ASML reported third-quarter results that fell short of market expectations.
ASML's bookings in the third quarter significantly declined to EUR2.6 billion, a 53% drop from the previous quarter. This downturn was a key factor in TD Cowen's reassessment. Additionally, the company's revenue and gross margin outlook for the calendar year 2025 were revised downward, with new projections standing at EUR32.5 billion and 52% at the midpoint, respectively.
The revised forecast for the calendar year 2025 includes several factors contributing to a less optimistic outlook. These include a decrease in the expected number of low-NA EUV units, estimated by TD Cowen to be 48 units, a lower sales mix from China accounting for approximately 20% of sales, and gross margin headwinds.
Consequently, TD Cowen has reduced its earnings per share (EPS) estimate for ASML to EUR23.00.
ASML's upcoming Capital Markets Day on November 14th could offer further insights into the company's plans and performance expectations for the calendar year 2026. TD Cowen suggests that additional details provided during this event may potentially benefit the stock's performance.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on ASML's current market position and financial health. Despite the recent price target reduction by TD Cowen, ASML maintains a strong market presence with a substantial market capitalization of $269.66 billion. The company's P/E ratio stands at 35.82, reflecting investor expectations of future growth despite recent challenges.
InvestingPro Tips highlight that ASML has been a prominent player in the Semiconductors & Semiconductor Equipment industry, which aligns with the article's focus on the company's importance in the sector. Additionally, ASML has maintained dividend payments for 18 consecutive years, showcasing its commitment to shareholder returns even in challenging times.
The company's financial metrics reveal a mixed picture. While ASML's revenue for the last twelve months reached $29.30 billion, it experienced a slight decline of 1.92% during this period. However, the company maintains a robust gross profit margin of 51.15%, indicating strong pricing power and operational efficiency.
It's worth noting that ASML's stock has taken a significant hit recently, with a 3-month price total return of -26.55%. This decline aligns with the article's mention of disappointing third-quarter results and reduced forecasts. However, the stock's current price is at 61.73% of its 52-week high, suggesting potential room for recovery.
Investors seeking more comprehensive insights can access additional InvestingPro Tips, with 15 more tips available for ASML on the platform. These tips could provide valuable context for understanding the company's future prospects in light of recent developments.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.