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Publication date: July 12, 2024
ASML once again positively made the news this week. The share price broke the magic barrier of € 1,000, -. This is quite special because four years ago the share price was around € 300, - and ten years ago around € 60, -. Such price increases make ASML shares a stock market darling, despite their fairly high volatility.
Before we get to expectations, let's start with a brief introduction of the company this article is about. Founded in 1984 by Philips and ASMI, ASML produces chip machines. It has specialized in the special technique of photolithography and is the world market leader in this field. For a few years now, ASML has been achieving great success with its self-developed Extreme Ultra Violet technique. This technique makes ASML unique and gives the company great potential for the near future.
Since 1995, ASML has been tradable on the Amsterdam Stock Exchange. Currently, ASML weighs about 16% in the AEX, determining about half of the Amsterdam stock index along with Unilever and Shell.
But what now? Is it wise to still jump on this moving train? In other words:
What is ASML's share price expectation?
Fundamental analysis of ASML stock:
If we make a round through the analysts of major banks and managers, the overall trend is not surprising. 85% of the analysts give a Strong Buy recommendation for ASML and the remaining 15% give a Hold recommendation. The price targets range up to €1,300, - but on average the expectation is that ASML can rise to around €1,060, -. Fundamentally, then, the outlook is positive with a somewhat limited potential of about 5%.
Technical analysis of ASML stock:
For the technical analysis, we look at the price movement from summer 2020. In the chart below of ASML from July 2021, we can see immediately the trend rise and high volatility.
Importantly, the increased risk of intermediate-term declines is always rewarded with strong price gains. We consulted our technical algorithm and plotted the most likely scenario in the chart. This scenario indicates a short-term rise to around €1,125, followed by a correction that could go back up to around €750, before provisionally rounding out this trend with a rise that could eventually lead to around €1,275, -.
Conclusion:
ASML is an extremely well-positioned company in the sector that continues to grow rapidly. Financially, ASML is in good shape. Its large investments in development give ASML a technological edge in the high-tech sector, making it less susceptible to major market fluctuations. Still, ASML remains volatile and one should take into account that the price can correct significantly.
For the short term, there is still a price increase in the range of 5 to 10 percent. It's worthwhile in itself but as said; Stay vigilant as it seems we are approaching the final surge before a potential price correction, so keep a close eye on the situation. It gets more interesting when the price is back around €750. From that level, we can expect another sharp rise to the price targets that are calculated both fundamentally and technically of around € 1,250- € 1,300. Possibly this will provide the impetus for the final sprint.
Disclaimer: Investing involves risk. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts' insights and experiences. They are therefore for educational purposes only.
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