Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
magazineASML up 30% in three months, but more to come
ASML (ASML:AMS) €342.9
Gain to date: 29.6%
Original entry point: Buy at €264.6, 23 April 2020
The global microchip industry seems to be in rude health judging by ASML’s second quarter figures on 15 July. There was certainly no hint of any threat of orders being delayed this year because of the pandemic as net profit rose sharply, driven by higher sales and improving margins.
ASML, the Dutch supplier of crucial equipment to semiconductor giants like Samsung, TSMC and Nvidia, beat analyst expectations for the quarter and insisted 2020 will be a growth year.
Analysts are anticipating 13% sales growth in 2020, impressive given the disruption of Covid-19 to business globally, and Liberum is now forecasting an acceleration to 19% in 2021.
ASML made a quarterly net profit of €751 million compared with €476 million in the equivalent 2019 quarter, on net sales up from €2.57 billion to €3.33 billion.
That the stock dipped 3.5% on the day says more about the sharp rally to more than €340 since we flagged the discounted buying opportunity three months ago.
‘We presently forecast gross margins to rise to 51.1% and 53% in 2021 and 2022, from an estimated 47.8% in 2020,’ said Liberum analyst Janardan Menon, largely thanks to new platforms on ASML’s core extreme ultraviolet lithography and other technology ranges.
SHARES SAYS: It has already hit the €340 target we initially flagged but you should continue buying this fine company.
Important information:
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
