ASM: Premium Margins And Advanced Node Demand Will Support Further Share Gains

Analysts have nudged their price target on ASM International slightly higher to about EUR 627 from roughly EUR 626, citing stronger confidence in the company’s long term revenue growth, profit margins, and valuation multiple as reflected in recent target increases from major brokerage houses.

Analyst Commentary

Bullish analysts have recently pushed their price targets for ASM International toward the mid EUR 600s, reinforcing the view that the company can sustain robust top line growth and defend premium valuation multiples.

Bullish Takeaways

• Recent target hikes to the EUR 640 to EUR 650 range signal growing conviction that ASM International can outgrow the broader wafer fab equipment market over the medium term.
• Analysts point to a solid order pipeline in leading edge nodes and advanced packaging, which supports visibility on revenue growth and underpins a higher justified earnings multiple.
• Improving scale and product mix are expected to support structurally higher margins, helping to translate top line momentum into stronger free cash flow generation.
• Consensus views increasingly position ASM International as a strategic beneficiary of rising capital intensity in semiconductors. This could support further upside to estimates if spending cycles prove more durable than currently modeled.

Bearish Takeaways

• Bearish analysts caution that the rapid run up in the share price has already priced in a large portion of the anticipated growth, limiting near term upside even with higher targets.
• There are concerns that any delays in customer capex plans or node transitions could expose ASM International to order volatility, putting pressure on execution and margins.
• Some remain wary that sustaining a premium valuation will require consistent outperformance versus peers, leaving little room for missteps in technology roadmaps or product rollouts.
• Macro and industry cycle risks, including a potential slowdown in end market demand, could challenge the optimistic earnings trajectories now embedded in upgraded target prices.

What's in the News

• Confirmed fourth quarter 2025 revenue guidance of €630 to €660 million, with full year 2025 revenue growth expected to be close to 10% at constant currencies (company guidance).
• Lowered outlook for the second half of 2025, now expecting H2 revenue to be 5% to 10% below H1 due to softer demand in leading edge logic/foundry and power/wafer/analog markets. This implies full year 2025 growth at the lower end of the prior 10% to 20% range (company guidance).
• Confirmed third quarter 2025 revenue guidance while adjusting the 2027 revenue target to EUR 3.7 billion to EUR 4.6 billion on a currency adjusted basis (company guidance).
• Set a new long term ambition for revenue to grow to more than EUR 5.7 billion by 2030, underscoring confidence in multi year demand drivers despite near term volatility (company guidance).

Valuation Changes

• Fair Value Estimate has risen slightly to about €627.47 from roughly €626.16, reflecting a modest uplift in long term expectations.
• Discount Rate has increased marginally to approximately 8.36% from about 8.32%, implying a slightly higher required return from investors.
• Revenue Growth Assumption has edged up to around 11.47% from roughly 11.45%, signaling a very small improvement in projected top line expansion.
• Net Profit Margin has ticked up fractionally to about 25.32% from roughly 25.32%, indicating essentially unchanged long term profitability expectations.
• Future P/E Multiple has risen slightly to approximately 33.28x from about 33.18x, suggesting a modestly higher valuation applied to expected earnings.