ASML () shares fell for a second day in a row after its third-quarter earnings revealed lower-than-expected new orders and a weaker revenue forecast for 2025.
Shares in the Netherlands-listed company, which supplies semiconductor equipment to Samsung, Intel and TSMC, lost over 15% on Tuesday after the figures were released and fell more than 5% on Wednesday.
ASML, one of Europe’s largest tech firms, reported third-quarter orders of €2.6 billion, including €1.4 billion for its latest generation of EUV machines, down from €5.6 billion recorded in the second quarter this year.
Morningstar analyst Javier Correonero lowered his fair value estimate for ASML shares from €900 to €850 after the results.
Key Morningstar Metrics for ASML Stock
Analyst: Javier Correonero
• Fair Value Estimate: EUR 850
• Morningstar Rating: ★★★★
• Economic Moat: Wide
• Morningstar Uncertainty Rating: High
ASML Third-Quarter Orders Weak
Morningstar analyst Javier Correonero said on Oct. 16:
“ASML’s shares declined 14% as the firm accidentally published its third-quarter results one day ahead of schedule. ASML lowered its 2025 revenue guidance and now expects revenue to be in the EUR 30 billion to EUR 35 billion range. Although this falls inside management’s EUR 30 billion to EUR 40 billion target set at the 2022 investor day, we expected 2025 revenue to be in the midpoint of the guided range, as management commentary in the past two quarters pointed toward reaching that goal. 2025 gross margins will also be weaker, in the 51% to 53% range, compared with management’s previous target of 54% to 56%, due to lower sales and postponement of some EUV orders. China should moderate to around 20% of group revenue in 2025, which we expected.
“Third-quarter orders were weak, which mostly explains the weak 2025 guide, and came in at EUR 2.6 billion versus expectations of EUR 5 billion. Logic foundries are ramping up new nodes at a slower pace than expected, and ASML is seeing little capacity additions in memory so far. We believe Intel is at the heart of ASML’s weaker outlook, as it recently postponed the opening of its Magdeburg fab, and more delays and issues could keep coming. In September, Samsung issued an apology letter to investors for its recent technological underperformance, so we believe both firms might have a more cautious 2025 perspective. In the memory market, capacity additions—aside from high-bandwidth memory needed for AI buildout—remain weak.
“We cut our fair value estimate to EUR 850 from EUR 900 per share, as we reduce our 2025 and 2030 forecasts. We now assume EUR 32.1 billion in revenue in 2025, versus EUR 36 billion previously, and EUR 54.1 billion in 2030, compared with EUR 58.4 previously. In our view, ASML is a good buying opportunity after this pullback, and the current share price is discounting a too pessimistic long-term scenario. At the EUR 668 closing price, ASML is trading at a 28.5 times forward 2025 PE ratio based on our estimates.”
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