Key Morningstar Metrics for ASML
- : €1,800Fair Value Estimate
- : ★★Morningstar Rating
- : WideMorningstar Economic Moat Rating
- : HighMorningstar Uncertainty Rating
What We Thought of ASML’s Earnings
We are updating our long-term ASML ASML forecasts as the firm intends to expand Low-NA EUV and DUV immersion capacity by 30% in 2027 and another potential 30% in 2028.
Why it matters: Expansion would bring capacity to 85/110 Low-NA EUV systems by 2027-28 and 170/220 DUV immersion systems by 2027-28, compared with today’s 65 and 130 units, respectively. The high-demand environment has become more real in the second quarter, as customers have begun committing orders with down payments, giving ASML confidence to expand. The new 2027 capacity is virtually all booked, and we estimate the additional 30% 2028 expansion is very likely to proceed as ASML has already received large orders.
- While our previous 2030 revenue forecast was anchored to the top end of ASML’s long-term guidance of €60 billion, this number looks irrelevant now, as we estimate ASML could deliver close to €70 billion in revenue and €69 in EPS already in 2028, even without fully utilizing its capacity.
- We must wait until the 2027 capital markets day for new revenue targets, but we estimate 2030 sales could exceed €80 billion with little new capacity additions. After a 28% 2026-28 sales CAGR, we model high-single-digit growth in 2029-30, as growth moderates after the ambitious expansion.
The bottom line: We raise our fair value estimate to €1,800 from €1,200 per share for wide-moat ASML as we incorporate the new forecasts into our model.
Bears say: To stress test our new fair value, we model a bear scenario where after the massive 2026-28 expansion, sales growth stalls in 2029-30, similar to what happened in late 2024. Under this scenario, a two-year period of capacity digestion would arrive, bringing 2029 EPS to €57 versus €77 in our base case. ASML’s forward PE would likely contract to the 20-25 times range, where it has historically traded during cycle troughs, resetting valuation to the €1,100 to €1,400 range. This means our bear case is aligned with our previous base case.
