We value ASML using a ~1.6x PEG based on FY26 earnings, inline with other strong growth stocks in our coverage, which leads to our TP of EUR860. Given the strong multi-year growth forecast for ASML, we have decided to look further out than 2025 to capture the growth potential. We think this approach better captures the 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 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.