We value ASML using a ~1.2x PEG based on FY26E earnings, in line with other strong growth stocks in our coverage, which leads to our target price of EUR825. We continue to have conviction in ASML's long-term growth outlook, as evident in our forecast of a high-teen CAGR in EPS through 2030E. Given our strong multi-year growth forecast for ASML, we look further out than 2025/26 to capture the growth potential. We think this approach better captures its long-term exposure to artificial intelligence, semiconductor capex and other structural growth areas.

We highlight the following risk factors for ASML. 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: Challenges in development of EUV technology could result in delays and lower margins.

Competition: A gain/loss in lithography and/or process control market share would result in upside/downside risk to our estimates.  

Customer Risk: ASML derives significant share of its revenues from a few large customers, and an increase/cut in their capex could result in risk to our estimates.

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.