- As a result of cyclical, structural, and geopolitical forces, semi fab equipment capex will be elevated in the next few years, boding well for ASML’s lithography system sales.
- EUV adoption is set to rise across foundry and DRAM players while DUV sales will be structurally higher driven by automotive end-market demand.
- Higher systems sales will in turn drive higher installed base management revenue, which is a higher margin business than system sales.
- I expect revenue to grow 15.2% CAGR across FY21-25, hitting EUR 33bn by 2025, 39% higher than the EUR 24bn stale guidance, and 27.5% above street estimates.
- Applying 45x to my FY22 EPS forecast of EUR 18.3, I derive a target price of EUR820/US$970, representing 23% upside as of 13 August 2021.
For further details see:
ASML's Growth Outlook Set To Surprise To Upside Significantly