We value ASM International using a ~2.3x PEG based on discounted FY27 earnings, inline with other strong growth stocks in our coverage, which leads to our TP of EUR600. Given the strong multi-year growth forecast for ASM, we have decided to look further out than 2025 to capture the growth potential. We use our 2027 EPS estimates and discount them back two years to 2025. We think this approach better captures the long-term exposure to artificial intelligence, semiconductor capex and other structural growth areas.

Although the recent share price volatility means our quantitative model points to a High Risk rating, we do not assign one as we believe the earnings profile should become more stable, particularly benefiting from greater visibility and diversification of end applications.

We highlight the following risk factors for ASM. If the impact of these risk factors is more or less negative than we anticipate, the share price could deviate significantly from our target price:

• Technological: ASM is involved in various types of development activities associated with deposition techniques across different stages of maturity with customers as well as research partners.

• Competition: ASM competes with highly credible competitors within deposition who could leverage superior economies of scale and broader portfolio of technologies.

• Customer: ASM derives a significant share of its revenues from its three largest customers, and its prospects are therefore highly sensitive to their capital expenditure plans.

• Macroeconomic: A weak macroeconomic environment and/or escalation in geopolitical tensions resulting in subdued semiconductor growth/increase in cadence could cause downside to our estimates.

• Investor positioning: Near-term market sentiment poses a tactical risk with ASM boasting of a high crowding composite rank as per data from Citi's quantitative research team.