Investing.com — Freedom Broker upgraded to “buy” from “hold” and raised its price target to $1,650 from $950 after the company reported first-quarter results that exceeded expectations and increased its full-year revenue outlook.
ASML posted Q1 revenue of €8.77 billion, up 13.2% year-on-year and down 9.8% quarter-on-quarter, landing near the upper end of its guidance and 1.5% above consensus, according to Freedom Broker.
Gross margin came in at 53%, at the high end of the company’s 51%-53% range, while diluted earnings per share reached €7.15, exceeding the €6.60 consensus by 8.3%.
The brokerage cited a shift in product mix toward extreme ultraviolet (EUV) systems, which accounted for 66% of system revenue, or about €4.1 billion, compared with 48% in the prior quarter. Net system sales were €6.28 billion, while installed base management revenue reached €2.49 billion, above the €2.37 billion consensus.
Chief Financial Officer Roger Dassen said installed base revenue was “a little bit above the guidance” with components that “actually come in at quite some strong gross margins.”
Freedom Broker said the geographic mix shifted toward South Korea, which represented 45% of shipments, up from 22% in the previous quarter, while China declined to 19% from 36%. Memory accounted for 51% of system sales, compared with 30% in Q4, reflecting demand tied to high-bandwidth memory.
The brokerage noted that ASML did not disclose Q1 order intake but cited large orders from Samsung and SK Hynix, including an $8 billion order from SK Hynix and a $7.4 billion order from Samsung.
Chief executive Christophe Fouquet said “ASML’s order intake continues to be very strong” and that “customers have increased their expected short- and medium-term demand for our products.”
ASML guided second-quarter revenue to €8.4 billion-€9 billion, below the €9.08 billion consensus, but raised its full-year 2026 revenue outlook to €36 billion-€40 billion from €34 billion-€39 billion previously.
Fouquet said the increase reflects customers accelerating capacity plans “for 2026 and beyond, supported by long-term agreements.” The company maintained full-year gross margin guidance at 51%-53%.
Freedom Broker raised its estimates, projecting €39.6 billion in revenue and €32.28 in EPS for 2026, and €46.4 billion and €39.35 respectively for 2027. It set the price target based on 36x projected 2027 earnings.
The brokerage said the upgrade reflects higher estimates, sustained demand signals, and improved visibility supported by multi-year orders and increased installed base revenue.