[UPDATED EARNINGS REVIEW] ASML NA reports stellar results, impressing sell-side analysts; JPM expects the Dutch company to close the valuation gap with US peers

Analyst Commentary:  JPMorgan suggested that ASML’s plans to raise lithography equipment output by about 30% in 2027 and again in 2028, implied that 2028 FY EPS could be greater than EUR 65 (vs expectations of c. EUR 61/shr). JPM also noted that the results will help push back on bearish narratives that ASML is dealing with limited-capacity. They see the co. closing its valuation gap vs US players. Citi suggested that ASML delivered an “unexpectedly” large increase to its FY outlook. On the supply front, analysts write that the 2027 plans to boost output is a touch below expectations (c. 85 vs exp. 90-100), whilst 2028 matched the upper end of expectations (110). The analysts conclude by writing that “ASML are willing to provide the market with clear bottoms up guidance two years out, something that we think should be viewed positively”. Bank of America and Morgan Stanley both maintained their “Buy” and “Overweight” ratings on the company, with a PT of EUR 2,022/shr and EUR 1,830/shr, respectively. Earnings Review: Overall, strong metrics from the Dutch semiconductor maker; it beat on top- and bottom-lines, with Gross Profit Margin and Net Income also topping analyst expectations. Heading into the results, there was broad optimism surrounding the headline results themselves, given the recent AI-driven memory/chip upcycle. As such, there was perhaps more focus on the accompanying FY guidance and commentary. On that note, the Co. lifted FY revenue and gross margin well above expectations, and Q3 guidance also impressed. CEO Fouquet also provided upbeat commentary where he stated that AI-related investments are driving demand, adding that order intake remained "extremely strong" in H1. On the supply front, he suggested that there are plans to add 30% to its 2026 NAV EUV capacity, with aims to boost it further in the coming years. Also driving the optimism is news that Intel has decided to use ASML equipment for its Panther Lake laptop chips.