ASML Holding NV (AS::NA) Stock Downgraded by UBS: What Investors Need to Know
UBS recently downgraded ASML Holding NV (AS::NA) stock from Buy to Neutral, citing expectations of a deceleration in the company's earnings per share (EPS) growth rate. The price target was also lowered to €900 from €1,050. While ASML has been a standout in the European technology sector, UBS anticipates a compound annual growth rate (CAGR) of 13% from 2025 to 2030, compared to the 24% CAGR observed from 2018 to 2025.
UBS suggests that the anticipated growth rate justifies a normalization of ASML's stock multiples relative to its peers and historical averages. Despite a solid outlook for 2025, the focus is expected to shift towards the 2026/27 period, with a 5-10% downside to consensus estimates for earnings before interest and taxes (EBIT) in the coming years.
The cautious outlook is based on several factors, including a plateau in lithography intensity within both logic and memory sectors, a potential slowdown in extreme ultraviolet (EUV) layer additions in DRAM manufacturing, and risks in the Chinese market. UBS also notes that revenues from artificial intelligence (AI) end-uses may not be enough to counterbalance these trends.
On a positive note, Barclays has upgraded ASML Holding NV stock from Equalweight to Overweight, increasing the price target to €1,150. Barclays foresees continued growth for ASML in the coming years, with a projected 15% year-over-year growth in 2026 following a 27% growth in 2025.
In summary, ASML's stock has been downgraded by UBS due to expectations of slower growth in the future. While there are challenges ahead, some analysts remain optimistic about the company's prospects. Investors should carefully consider these factors before making any investment decisions.
Analysis: ASML Holding NV (AS::NA) stock has been downgraded by UBS, signaling potential challenges ahead for the company. Despite a strong performance in the past, concerns about future growth rates have led to a more cautious outlook. Investors should pay attention to these developments and consider their impact on their investment portfolios.