JPMorgan Lowers ASML's Price Target to EUR 822, Maintains Overweight Rating

JPMorgan has revised its price target for ASML from EUR 970 to EUR 822, while maintaining an Overweight rating. The average target price for ASML is $878.98, with a high estimate of $1,046.28 and a low estimate of $714.62, implying an upside of 17.95% from the current price. ASML reported Q2 2025 total net sales of EUR7.7 billion, reaching the upper end of guidance, with a gross margin of 53.7% above guidance.

JPMorgan has revised its price target for ASML Holding NV (ASML) from EUR 970 to EUR 822, while maintaining an Overweight rating on the stock. This adjustment reflects a recalibration of the firm's expectations for ASML's financial outlook in the current market environment [1].

Based on the one-year price targets offered by 13 analysts, the average target price for ASML is $878.98, with a high estimate of $1,046.28 and a low estimate of $714.62. This implies an upside of 17.95% from the current price of $745.19 [1].

In its Q2 2025 results, ASML reported total net sales of EUR7.7 billion, reaching the upper end of its guidance. The company's gross margin for the quarter was 53.7%, above guidance, driven by increased upgrade business and lower-than-expected tariff impacts. Net income for Q2 was EUR2.3 billion, representing 29.8% of total net sales, with earnings per share of EUR5.90 [2].

ASML expects a 30% increase in EUV capacity in 2025 compared to 2024, driven by higher productivity of the NXE:3800E systems. The company anticipates a 15% revenue increase for the full year 2025, with a gross margin of around 52% [2].

However, ASML faces increasing uncertainties due to macroeconomic and geopolitical developments, impacting customer capital expenditure timing. The gross margin in the second half of 2025 is expected to be lower than the first half, primarily due to the margin dilutive effect of High NA systems. There is a EUR1.4 billion adjustment in the backlog related to customer responses to export restrictions, affecting Deep UV and application business. The company has not confirmed growth for 2026 due to ongoing uncertainties, despite preparing for potential growth [1].

ASML's CEO Christophe Fouquet stated, "Our second-quarter total net sales came in at €7.7 billion, at the top end of our guidance. The gross margin was 53.7%, above guidance, primarily driven by higher upgrade business and one-offs resulting in lower costs. We see continued progress in litho intensity, particularly in DRAM, and the introduction of the TWINSCAN NXE:3800E reinforces that momentum. Meanwhile, EUV adoption is advancing as planned, including High NA. This quarter, we shipped the first TWINSCAN EXE:5200B system. Looking at 2026, we see that our AI customers’ fundamentals remain strong. At the same time, we continue to see increasing uncertainty driven by macro-economic and geopolitical developments. Therefore, while we still prepare for growth in 2026, we cannot confirm it at this stage. We expect third-quarter total net sales between €7.4 billion and €7.9 billion, with a gross margin between 50% and 52%. We expect R&D costs of around €1.2 billion and SG&A costs of around €310 million. For the full year 2025, we expect a 15% increase in total net sales and a gross margin of around 52%" [2].

Freedom Broker, in a recent report, downgraded ASML's stock rating to Hold from Buy, while maintaining a price target of $790. The downgrade followed ASML's Q2 earnings report, which exceeded expectations but was accompanied by mixed guidance for the third quarter. Despite external risks, management reaffirmed its fiscal year 2025 targets. The company maintains strong fundamentals, with revenue growth of 26.4% and an overall financial health score of "GOOD" according to InvestingPro’s comprehensive analysis [3].

References:
[1] https://www.gurufocus.com/news/2985739/asml-jpmorgan-adjusts-price-target-but-maintains-overweight-rating-asml-stock-news
[2] https://www.jamessharp.co.uk/market-news/asml-reports-e7-7-billion-total-net-sales-and-e2-3-billion-net-income-in-q2-2025/
[3] https://www.investing.com/news/analyst-ratings/freedom-broker-downgrades-asml-stock-rating-to-hold-on-mixed-guidance-93CH-4144782