ASML Holding N.V

ASML Holding N.V (NASDAQ: ASML) is a semiconductor manufacturer. The Company offers a range of mainstream wafer fabrication services and technologies. It manufactures a range of semiconductor devices, including microprocessors, mobile application processors, baseband processors, network processors, radio frequency modems, microcontrollers, and power management units.

Recent Business and Financial Updates

• Q3 2024 Financial Results: ASML reported total net sales of Euro 7.5 billion for Q3 2024, surpassing the company’s initial guidance. This performance was driven primarily by strong sales of Deep Ultraviolet (DUV) lithography systems and Installed Base Management, which contributed to a gross margin of 50.8%, within the expected range. Net income for the quarter reached Euro 2.1 billion, while earnings per share (EPS) stood at Euro 5.28, reflecting solid profitability. Net bookings for the quarter amounted to Euro 2.6 billion, with Euro 1.4 billion attributed to Extreme Ultraviolet (EUV) sales.
• Q3 FY24 Performance Breakdown: The company sold 106 new lithography systems during Q3 2024, compared to 89 units in Q2 2024. Additionally, ASML sold 10 used lithography systems during the quarter, slightly down from 11 units in the prior quarter. Installed Base Management sales reached Euro 1.54 billion, a slight increase from Euro 1.48 billion in Q2. Gross profit for the quarter totaled Euro 3.79 billion, up from Euro 3.21 billion in Q2, reflecting a stable margin performance despite market challenges.

ASML projects total net sales for 2025 to fall between Euro 30 billion and Euro 35 billion, with a gross margin expected to be between 51% and 53%. This forecast is lower than the company's previous projections from its 2022 Investor Day, primarily due to the delayed timing of EUV demand. The company anticipates gradual recovery in the market through 2025, with cautious customer sentiment in light of current market conditions.

• Full-Year 2024 Guidance: ASML has revised its full-year 2024 net sales outlook to approximately Euro 28 billion, reflecting continued growth despite some market uncertainty. While the company remains optimistic about the potential of artificial intelligence (AI), it has noted that recovery in other market segments is taking longer than previously anticipated. Specifically, the logic market is seeing slower adoption of new nodes due to competitive foundry dynamics, which has resulted in several fabs delaying production schedules and changes in lithography demand, particularly for EUV systems.
• Dividend and Share Buyback Update: ASML has declared an interim dividend of Euro 1.52 per ordinary share, payable on November 7, 2024. However, the company did not repurchase any shares in Q3 2024 under its 2022-2025 share buyback program. The company remains committed to returning value to shareholders while navigating the current market landscape.
• Strategic Growth: ASML Holding N.V. (ASML) has provided an update on its long-term strategy, highlighting global market trends and technological advancements. The company projects that annual revenue could range between approximately Euro 44 billion and Euro 60 billion by 2030, with a gross margin expected to fall between 56% and 60%.

Technical Observation (on the daily chart):

ASML's stock price has recently found support at key levels, with the closing price at 658.63. Support is observed at 612.53 and 573.01, while resistance levels are at 717.91 and 770.60. The 14-day Relative Strength Index (RSI) at 36.48 is above the neutral level, suggesting the potential for a pullback that could set the stage for an upward rally. Additionally, the 21-day and 50-day Simple Moving Averages (SMAs) remain below the current price, reinforcing a bullish outlook with these moving averages acting as immediate support.

As per the above-mentioned price action, recent key business and financial updates, and technical indicators analysis, a ‘Buy’ rating has been given to ASML Holding N.V (NASDAQ: ASML) at the closing market price of USD 658.63 as of November 15, 2024.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is November 15, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.