ASML was always a top holding in the Calamatta Cuschieri Euro Equity Fund and we continue to believe in the long-term story of the Group. We have a €200 Price Target on the Stock. Shares of ASML are up 200% over a period of 5-years.

ASML does not seem to be slowing down anytime soon as it reported excellent results for Q118.

Our price target reflects our increased optimism that the Group which is very close to meeting its 2020 target sales figures. However, what is even more attractive about this company is that management is expecting growth to really kick in post 2020 where the company expects to see strong demand for its Extreme ultraviolet lithography (EUV) technology.

Rationale for our recommendation:

Forecasted sales – Our forecasted sales for 2018 are close to the company’s target for 2020 (even those of the market in general). In fact, we would not be surprised if in the second half of 2018, ASML would decide to hold an investor event to update targets for 2020 but also potentially set the target for 2025. Historically, the market has been willing to take a long-term view on ASML and updating the ’20 target and setting an expectation for 2025 would help the stock.

Forecasted earnings – Management are expecting earnings greater than €9 per share in 2020. We are forecasting an earnings figure of €8 per share in 2020. However, we are optimism that management will reach their earnings target and they could easily be beaten given the strong drive we are seeing for their products. In fact, it seems that future years are expected to be even better than past years due to the increase in global growth which is increasing the demand for ASML’s products

Forward multiple – our model is factoring in a Price-to-earnings multiple of 31x on future earnings. Although for certain industries this might sound as being on the high side, for this particular company we believe it is justified given the future growth prospects of the Group

Discount rate – we are discounting our future earnings by 15% to factor, which again is conservative. A lower discount factor would result in a higher price target

The dividend – Proposal submitted to 2018 Annual General Meeting of Shareholders to pay a dividend of € 1.40 per ordinary share, for a total of around € 600 million, in respect of fiscal year 2017. Management expect to continue to return excess cash to their shareholders through stable or growing dividends and regularly timed share buybacks in line with their policy.

Share buyback program – €2.33 billion remain of the 2018/2019 share buyback program remaining. This is being reflected in our model.


ASML regularly exhibits above average volatility. We have captured this factor in the discount rate. However, investors should be aware of this fact

ASML is practically a monopoly in the sector, our base assumption is that ASML maintains the current technology gap, thus making competition unfeasible. This assumption would be at risk if an alternative technology disrupts the current status


We are comfortable holding ASML in a well-diversified portfolio. It is well positioned to continue to benefit from further growth as global economic growth continues to remain supportive.

ASML has a strong set of financial statements and we expect the company to continue strengthening its position in years ahead.

About ASML

ASML is a Dutch company and currently the largest supplier in the world of photolithography systems for the semiconductor industry. The company manufactures machines for the production of integrated circuits (ICs), such as CPUs, DRAM memory, flash memory. The company is a component of the Euro Stoxx 50 stock market index.