UBS maintains a Buy rating on ASML, raises target price to €1,600

Overview

This is a UBS company earnings review on ASML. After the first quarter, the report raised ASML's 2026E-2028E EPS estimates by 3%-5%, arguing that advanced logic, memory/HBM demand, immersion DUV supply constraints, low-NA EUV capacity expansion, and potential High-NA order news flow will continue to support the company's multi-year growth. UBS maintained its Buy rating and raised its target price from €1,500 to €1,600.

Core views

The key view is that ASML's growth momentum remains stronger than the market expects. The company's FY revenue guidance was raised from 4%-19% y-o-y growth to 10%-22%, reflecting stronger-than-expected immersion equipment demand driven by advanced logic and memory. UBS expects ASML to prioritize its constrained capacity for advanced logic and memory, sacrificing some China revenue, and therefore cut its 2026E China revenue forecast from a prior 1% y-o-y decline to a 10% decline, though that still remains above the roughly 20% decline implied by the midpoint of company guidance. In EUV, investors are focused on whether capacity can meet demand; UBS believes the next-generation EUV F platform's throughput improvement to more than 260 wafers per hour, versus about 220-230 wafers for the E model and about 160 wafers for the D model, is a meaningful capacity-efficiency improvement that the market has not fully reflected.

Analysis framework

The report combines post-earnings forecast revisions, order and capacity breakdowns, end-market demand analysis for EUV/DUV, customer shipment forecasts, relative valuation, and DCF valuation. UBS focuses on advanced logic, memory, HBM, China DUV demand, low-NA EUV delivery capability, and High-NA order timing, and incorporates these assumptions into 2026E-2028E EPS, revenue, margins, and target price.

Methodology notes

• Valuation methodsDCF

  DCF valuation

  The €1,600 target price is based on a DCF approach, with core assumptions including a 9% WACC and a 3% perpetual growth rate; the report says the target price was raised from €1,500 to €1,600.

• forecastingEPS revision

  earnings estimate upgrade

  UBS raised its 2026E, 2027E, and 2028E EPS estimates by 3%, 4%, and 5%, respectively, to reflect higher revenue expectations.

• industry_analysisEUV/DUV shipment and end-market analysis

  EUV/DUV shipment and end-market segmentation

  The report assesses ASML's revenue growth and capacity constraints by segmenting demand across advanced logic, memory, non-China DUV, and China DUV.

• relative_valuationForward P/E comparison

  forward P/E comparison

  ASML trades at about 27.5x 2027E EPS, below its historical average of about 29x; the report also notes a 12-month forward P/E premium versus U.S. large-cap peers of about 12%, below the 10-year average of about 84%.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• ASML HOLDING NV (ASML.AS)

  core coverage name

  Strengths

  A global leader in semiconductor lithography equipment with a high EUV technology moat; customers include TSMC, Samsung, Intel, and SK Hynix; advanced logic, memory, and HBM demand support multi-year growth.

  Weaknesses

  Business is highly exposed to semiconductor capex cycles; immersion DUV and EUV capacity allocation is constrained; China revenue forecast has been lowered.

  Comparison

  2027E P/E is about 27.5x, below the historical average of about 29x; the 12-month forward P/E premium versus U.S. large-cap peers is about 12%, below the 10-year average of about 84%.

  Risks

  Slower end-market semiconductor demand, delayed customer capex, execution risk for High-NA/EUV technology, order postponements, a worsening macro environment, and changes to valuation assumptions.

• Semiconductor Equipment & Materials

  industry

  Strengths

  Advanced-node, HBM, and memory expansion drive equipment demand; EUV and DUV revenue is tied to end-market growth.

  Weaknesses

  The industry is highly cyclical, and WFE volatility flows through to equipment orders and revenue.

  Comparison

  ASML has few competitors in high-end lithography, with main competition from Nikon and Canon, but limited competitiveness at the cutting edge of advanced nodes.

  Risks

  A decline in global fab capex, export controls, changes in customer capacity planning, and macro and interest-rate pressures on valuation.

Key data

• RatingBuy12-month rating.
• Target Price€1,600Prior target price was €1,500.
• Current Price€1,230As of 2026-04-15.
• Implied Upsideabout 30.1%Estimated using the €1,600 target price and the €1,230 current price.
• FY Revenue Guidance10%-22% y-o-y growthPreviously 4%-19% y-o-y growth.
• UBS 2026E Group Revenue Growth Forecast+22% y-o-yAt the high end of the company's guidance range.
• 2026E EPS Revision€33.13 raised to €34.25, +3%Consensus is €29.87.
• 2027E EPS Revision€43.18 raised to €44.75, +4%Consensus is €39.46, and UBS is about 10%-15% above consensus.
• 2028E EPS Revision€47.60 raised to €49.97, +5%Consensus is €44.86.
• Low-NA EUV Delivery Guidanceat least 60 units in 2026, at least 80 units in 2027Used by the company to ease investor concerns about capacity.
• UBS 2026E EUV Tool Forecast75 unitsSlightly below some investors' assumptions of more than 80 units next year.
• EUV F Platform Throughput>260 wphAbove about 220-230 wph for the E model and about 160 wph for the D model.
• China Revenue Forecast2026E -10% y-o-yPreviously forecast at -1%; still above the roughly -20% decline implied by the midpoint of company guidance.
• Memory-related ASML Revenue Growth2026E +40%, 2027E +35%Shown as UBS forecast in the chart title.
• 2027E Valuation27.5x P/ECompared with a historical average of about 29x.
• 2025-2030E EPS CAGR21%Used by the report to support the valuation view.
• Market Cap€478b / US$564bTrading data and key metrics.
• 52-week Range€1,288.40-€561.10The original text shows E1,288.40-561.10.

Impact & implications

If UBS's view proves correct, ASML will benefit from a recovery in advanced logic and memory capex, HBM-related demand, continued expansion of low-NA EUV and DUV, and valuation catalysts from High-NA orders. For investors, the report suggests the market may be underestimating the extent to which the EUV F platform's throughput improvement will ease capacity constraints, and may also be underestimating how much 2027E earnings could exceed consensus. However, the downward revision to China DUV revenue, the semiconductor end-market cycle, and High-NA execution risk will still affect the realization path.

Risks

• A weaker macro economy or slower semiconductor end demand could reduce capital equipment spending, causing customers to delay or defer ASML orders.
• ASML's customers operate in cyclical businesses, so company revenue and orders may be highly volatile.
• There is execution risk in next-generation EUV and High-NA technology, and the pace of orders, installation, and high-volume ramp-up may fall short of expectations.
• Immersion DUV capacity constraints could force ASML to make allocation trade-offs among advanced logic, memory, and China customers.
• China revenue is forecast to decline 10% y-o-y in 2026E; further changes in regional demand or policy could affect the revenue mix.
• DCF valuation is sensitive to WACC, terminal growth, long-term revenue, and margin assumptions.

What to watch

• Whether the TSMC symposium releases updates related to High-NA or advanced-node capacity expansion.
• Whether High-NA orders appear in 2H26 as expected to support high-volume manufacturing installations in 2028.
• Whether actual low-NA EUV deliveries in 2026 and 2027 meet the company's guidance of at least 60 units and at least 80 units.
• Whether the throughput improvement after the EUV F platform launches in 2027 reaches more than 260 wafers per hour.
• WFE capex plans of advanced logic, HBM, and memory customers.
• Whether the decline in China DUV revenue is close to UBS's 2026E forecast of -10%, or closer to the roughly -20% decline implied by the midpoint of company guidance.
• Whether 2027E EPS continues to run 10%-15% above market consensus.