ASML FY25 outlook in line with CSS, 2026 will not be below 2025

ASML reported 3Q25 revenues below expectations, yet the outlook for 4Q25 is ahead of CSS. ASML expects approximately 15% sales growth in 2025 in line with CSS (14.4%). Despite the revenue miss, net earnings were slightly better than expected due to lower SG&A, R&D and net interests. ASML expects 2026 sales not to be below 2025, as Chinese demand will be significantly lower. Net bookings came in above a low CSS estimate. We would like to see a very strong order intake in 4Q25 before we lose visibility on the orders. While 2026 is to a large degree derisked, the expected revenue growth of 13% y/y in 2027, implies market share gains while market dynamics suggest a decrease. We maintain our 27x PE multiple, now applied to our FY27 Diluted EPS which results in a valuation of € 780 per share and supports our Hold recommendation.

Our view: Slightly weaker 3Q25, stronger 4Q25 outlook, and FY25 expectations in line with CSS, so not much to highlight here. The 2026 outlook remains weak, as anticipated. ASML states that 2026 will not be below 2025. This does not inspire much confidence, given the significantly lower demand from China, as outlined in our previous notes. ASML emphasizes the AI momentum, noting benefits for its customers and increased lithography intensity with EUV adoption. However, as discussed in our note yesterday, deposition and etch are expected to gain market share, and we anticipate lithography intensity to decline, as both logic and memory are nearing peak lithography intensity. We raise our estimates by 2–3% and apply a 27x PE multiple to our FY27 diluted EPS. This results in a valuation of €780 per share and supports our hold rating.