BofA: ASML $ASML(ASML.US)
Major Estimate Upgrades (CY26–28E)Following a strong Q2 earnings print, BofA materially upgraded its financial estimates: > Revenue Estimates: Raised by 13% to 15% across CY26–28E. This is driven by higher Argon Fluoride Immersion (ArFi) units/ASPs, higher Extreme Ultraviolet (EUV) ASPs, and higher Installed Base Management revenues. > Gross Margin (GM): Upgraded by 2.2 to 3.3 percentage points. This structural improvement is backed by a richer mix of ArFi and EUV tools, higher software revenues, and increased upgrade contributions. > Earnings Per Share (EPS): Upgraded significantly across the forecast horizon: 2026E EPS: Raised to €41.49 (previously €33.17, up 25%). 2027E EPS: Raised to €58.16 (previously €46.75, up 24%). 2028E EPS: Raised to €75.43 (previously €62.31, up 21%).> Memory Dominance: ASML’s guided CY26E memory revenue growth of 75% is expected to far outpace US peers, driven by the DRAM industry's structural transition to EUV. > Rising Tool Prices (ASPs): Low-NA EUV tool average selling prices (ASPs) are projected to climb to €245m in 2H26E (compared to €220–230m in H1), indicating stronger software attach rates. > Constrained OPEX: Operating expenses are expected to grow materially slower than group revenues due to operational efficiencies. > Confidence Beyond 2027: While the market is highly focused on ASML's 85 EUV unit target for 2027, management is confident in potentially scaling capacity to 110 EUV units beyond 2027.
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