Summit Research Reiterates On ASML, Sees 'Smooth Sailing' Ahead

Summit Research expressed confidence in its Buy rating on ASML Holding NV (ADR) ASML Thursday and maintained a $115 price target.

Analyst Srini Sundararajan commented that “ASML looks good in 2015 based on increased foundry spending at TSMC partly seen in backlog (Taiwan backlog grew by €563M and foundry spending grew by €568M), and guidance for solid memory and logic segments sales as well.”

Looking into bookings and backlog issues, the analyst report indicated that memory “is still 43 percent of the backlog and while only 27 percent of the orders in C4Q, that was only because it was overshadowed by foundry, though memory backlog went down by €275M. There seems to be a fair bit of memory shrinks capacity being delivered worldwide.”

“Service revenues that are now ~ €400M/Q should top a respectable €500M/Q within a year. We come up with estimates of €4750M/€3.60 and with a 26x multiple (low float remains) and cash ~ €7 per share in 2015” to reach the $115 price target, according to Sundararajan.

Sundararajan concluded that the company has "very smooth sailing" ahead and "really no worries."

ASML closed Thursday at $107.60, up 0.95 percent.