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<Research>JPM: ASML 1Q24 Orders Miss but Manageable as Shr Price Correction Offers Chance to Add to Positions
Recommend 5 Positive 6 Negative 8 |
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Dutch semiconductor equipment maker ASML (ASML.US) recorded a total order intake of EUR3.6 billion in 1Q24, down 60% QoQ, missing expectations. ASML's ADR closed down 7% to US$907.61 on Wednesday (17th). JPMorgan kept rating at Overweight, and trimmed its target price from US$1,196 to US$1,172. ASML's 1Q24 orders missed expectations, presumably because the original purchase agreement with TSMC (TSM.US) was not signed during the quarter, and thus TSMC's 2-nm equipment orders did not appear in 1Q24, according to JPMorgan. However, JPMorgan believed that weak 1Q24 orders do not mean that it is necessary to lower its 2024 or 2025 forecasts, only that it needs time to confirm the future performance. The current share price adjustment provides a chance to add to positions. Therefore, JPMorgan still considered the stock as its top pick. JPMorgan believed that ASML's 1Q24 order decline can be surmounted as the purchase agreement will take time to negotiate, but customers are still interested in placing orders, while ASML appears to have begun manufacturing equipment with spare capacity, reflecting that the Company has estimated that it will be able to secure orders. Therefore, a weaker-than-expected 1Q24 performance won't prevent the Company from reaching the upper end of its 2025 guidance level. AAStocks Financial News |
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