Bank of America raised its 2028 forecasts for ASML in a research note dated Oct. 6, 2026, despite expecting China’s share of the company’s revenue to drop from 29% in 2025 to 15% by 2028. In the updated model, BofA lifted ASML’s CY28E earnings per share forecast by 13% to EUR 85.2 from EUR 75.4, and increased its revenue estimate by 8.7% to EUR 76.57 billion from EUR 70.4 billion.
The bank kept its Buy rating and its “top pick” stance. It raised ASML’s price target to EUR 2,557 from EUR 2,452, and lifted its ADR target to $2,915 from $2,845. The upgrade rests on a clear assumption: price increases should begin to show up in profits by late 2027, while demand outside China can fill the gap left by a lower China revenue mix.
A 5% price increase translates into 8% EPS upside
BofA estimated that if ASML’s average selling prices rise by 5% and input costs increase by 2.5% at the same time, earnings per share would increase by 8%. If input costs do not rise, the uplift would be close to 10%. Its CY28E base case assumes roughly a 5% increase in ASP and about a 2.5% rise in input costs, which the bank described as conservative.
That pricing elasticity runs through the bank’s broader earnings model. BofA raised its ASP assumptions by about 5% across deep ultraviolet lithography, or DUV, extreme ultraviolet lithography, or EUV, and installed-base management. For low-NA EUV, for example, the ASP estimate was lifted to EUR 2.65 million from EUR 2.53 million, a 4.7% increase.
Margins also move higher under the pricing scenarios laid out in the note. BofA said that if ASP increases range from 5% to 20%, CY28E gross margin would rise from 58.2% to a range of 59.2% to 61.7%. In the 20% price-increase scenario, earnings would be 33% higher.
The bank tied that assumption to ASML’s market position. ASML holds more than 90% share in lithography equipment, and EUV systems remain a monopoly market for the company. On that basis, BofA said value-based pricing guidance should start affecting the profit and loss statement by late 2027.
2028 EUV shipment forecast raised to 120 units
BofA increased its CY28E EUV shipment forecast to 120 systems from 110, while keeping its CY27E forecast unchanged at 86. The higher 2028 figure reflects ASML’s gradual capacity expansion, a reallocation of factory space toward low-NA EUV, and shorter lead times from key suppliers including Zeiss.
The forecast for high-NA EUV shipments was left unchanged at 10. For 2028, BofA expects 68 low-NA EUV shipments for logic and 52 for DRAM. Its dry system shipment forecast was raised to 210 from 190, which lifted the related revenue estimate to EUR 2.945 billion from EUR 2.675 billion.
On revenue growth, the bank expects system revenue to rise 40%, 31.9% and 36.2% in CY26E, CY27E and CY28E, respectively. Over the same period, wafer fabrication equipment revenue is projected to grow 33%, 34% and 30%. BofA said ASML’s gross margin sits 6.5 percentage points above the global peer average, while the peer group average exceeds its own benchmark by just 1.3 percentage points. In the bank’s view, that margin profile is a key reason ASML can deliver a 50% earnings CAGR from 2025 to 2028E, the highest among global peers.
China mix falls, non-China revenue does the heavy lifting
BofA expects ASML’s China revenue to fall from EUR 9.52 billion in 2025 to EUR 8.675 billion in 2026E, then recover to EUR 9.789 billion in 2027E and EUR 11.602 billion in 2028E. The absolute figure rises again later in the forecast period, but the revenue share still declines from 29% to 15%.
Outside China, revenue is expected to climb from EUR 23.15 billion in 2025 to EUR 64.95 billion in 2028E. The bank sees that expansion as the main offset to the shrinking China mix.
Installed-base management revenue is projected to rise from EUR 8.193 billion in 2025 to EUR 14.994 billion in 2028E, with 2028 growth at 19%. Upward revisions to both system and non-system revenue are the structural support behind the higher earnings forecast.
Valuation, risks and the conditions behind the upgrade
BofA cut its valuation multiple for ASML to 25x CY28E EV/EBITDA from 27x. It said 25x sits in the middle of the historical 18x to 34x range and is broadly in line with the five-year historical median of 25.5x. The revised price target is based on that 25x CY28E EV/EBITDA multiple.
In the bank’s bull-case scenario, upside would come from stronger-than-expected EUV and DUV demand and better-than-expected EUV margins. Its earnings model shows CY28E revenue of EUR 76.571 billion, an EBIT margin of 49.5%, a net margin of 41.6%, and free cash flow of EUR 34.471 billion.
Those numbers depend on three conditions: price increases taking hold, EUV shipments being delivered on schedule, and non-China demand making up for the lower China mix. In that framework, the EUR 85.2 EPS forecast corresponds to a 5% ASP increase; the 120-unit EUV forecast has to be delivered on time; and non-China revenue needs to rise from EUR 23.15 billion to EUR 64.95 billion. If any one of those assumptions fails, the upgrade would have to be recalculated.
BofA also flagged policy and operational risks. It said uncertainty around the MATC Act could be removed before year-end and is already largely reflected in the share price, with more detail expected after U.S. midterm elections and defense budget talks. The main downside risks listed in the note were delays in EUV volume production, gross margin coming in below expectations, slower semiconductor capital spending, export restrictions on China, and a longer-term challenge to ASML’s monopoly position from emerging lithography startups.
This article is a summary and interpretation of a third-party broker research report from Bank of America dated Oct. 6, 2026, combined with public market information. The ratings, target prices, earnings forecasts and related views cited here are those of the broker’s analysts and represent the institution’s position only. They do not constitute investment advice.
Markets carry risk, and investment decisions should be made independently. This article should not be used as the basis for buying or selling any security.