ASML Shares Attract Bullish Target Hike Amid Valuation Concerns

A wave of increasingly optimistic analyst projections continues to propel ASML Holding NV's stock to new heights. The latest and most significant boost comes from Wall Street giant JPMorgan, which has issued a substantial upward revision to its price target, signaling strong confidence in the semiconductor equipment leader. However, this surge of enthusiasm is being met with caution from traditional valuation metrics, raising questions about whether the stock's rally is sustainable.

The focal point of the recent bullish sentiment is a major update from JPMorgan. Analyst Sandeep Deshpande raised the firm's price target for ASML to $1,518, a notable jump from the previous target of $1,275. This new assessment suggests an approximate 20% upside potential and reinforces the bank's "Overweight" rating on the shares.

This optimistic view is part of a broader trend among institutional researchers. Other firms have also adjusted their outlooks upward. Jefferies increased its target for the Amsterdam-listed shares to €1,020, while Rothschild Redburn lifted its target to €1,250, maintaining a buy recommendation. These coordinated upgrades underscore a widespread belief in the enduring strength of ASML's monopoly in extreme ultraviolet (EUV) lithography systems.

Lofty Valuation Presents a Counter-Narrative

Despite the prevailing bullish mood on Wall Street, fundamental analysis presents a more cautious picture. Key valuation multiples have reached levels considered ambitious both historically and within the sector. The price-to-earnings (P/E) ratio currently trades in a range between 44 and 51.

Should investors sell immediately? Or is it worth buying ASML?

A discounted cash flow (DCF) model provides a particularly stark contrast to the analyst euphoria. According to such calculations, the theoretical fair value of ASML stock sits around $950. If this model proves to be a more accurate reflection of intrinsic value than current market sentiment, the shares are currently trading at a premium exceeding 30%. This divergence between market price and estimated fundamental value represents a potential risk should the company's growth fail to meet elevated expectations.

Upcoming Earnings to Serve as Key Test

The debate between bullish price targets and cautious valuation models will likely find resolution on January 28, 2026. On that date, ASML is scheduled to release its fourth-quarter and full-year 2025 financial results. Market consensus anticipates earnings per share of approximately $8.72. Given the stock's impressive performance of nearly 80% over the past twelve months, the bar is set high. The company will likely need to exceed these forecasts to justify its current valuation.

This tension is reflected in the market's current positioning. The stock, trading at $1,270.16, hovers just below its recent 52-week high of $1,281.23. A strong quarterly report could provide the necessary catalyst to definitively break through this resistance level. Conversely, any disappointment, given the rich valuation, could swiftly trigger a wave of profit-taking.