BofA Global Research Highlights ASML as Top Semiconductor Capital‑Equipment Pick
BofA Global Research has assigned a Buy rating to ASML Holding and set a price objective of €2,452 per share. The analysts note that ASML currently trades at a 7.7‑turn discount to its historical EV/EBIT multiple, with a CY27E EV/EBIT multiple of 20.3× versus a median of 28.0×. Relative to global peers, ASML is valued at a 1.6‑turn discount, trading at 21.9× EV/CY27E EBIT, while major U.S. peers command a 6.1×‑7.0× premium to their historical averages. This valuation gap has contributed to ASML’s notable under‑performance against peers over the past twelve months.
The research firm projects that ASML will achieve a 27% compound annual growth rate (CAGR) in revenue through CY27, the highest among large‑cap semiconductor capital‑equipment peers, compared with a 22% average for the peer group. Earnings‑per‑share (EPS) is expected to grow at a 39% CAGR, outpacing the 33% average EPS growth of its peers. BofA’s forecasts are positioned above consensus estimates.
Margin outlook is a key focus: BofA anticipates ASML’s gross margin to expand by 4.6 percentage points over the next three years, whereas peers are expected to see only about 1‑2 percentage‑point improvements. The margin expansion is attributed to a richer product mix, rising software attach rates, and anticipated pricing benefits.
Lithography intensity is projected to rise to approximately 26% this year, up from 24.6% in CY25, driven by accelerating extreme ultraviolet (EUV) adoption in DRAM production and higher layer counts. This upward trend counters earlier concerns about a decline in lithography intensity within semiconductor manufacturing processes.
In a recent statement, ASML’s Chief Financial Officer indicated that the company’s capacity to produce EUV tools is nearly fully booked through the end of 2027, providing room for price increases. The CFO also confirmed that Elon Musk is scheduled to virtually attend an upcoming technology conference to discuss his Terafab project.
This article was generated with AI assistance and reviewed by an editor.