Bank of America raised its 2028 earnings and revenue forecasts for ASML in a report dated Oct. 6, 2026, arguing that pricing power could start showing up in profit by late 2027 even as China’s share of revenue declines.
The bank lifted its CY28E earnings forecast by 13% to €85.2 per share from €75.4. It also raised its revenue estimate by 8.7% to €76.57 billion from €70.4 billion. BofA kept its Buy rating and “top pick” designation, while increasing its price target to €2,557 from €2,452 and its ADR target to $2,915 from $2,845.
Pricing is the key assumption behind the upgrade
BofA’s model assumes that ASML can begin converting higher prices into profit from late 2027. The bank said non-China demand should be enough to offset the decline in China’s revenue mix.
According to the report, ASML holds more than 90% share in lithography equipment and has a monopoly position in EUV systems. That market position is the foundation for BofA’s pricing assumption.
BofA estimated that if ASML’s average selling price rises 5% and input costs rise 2.5% at the same time, earnings per share would increase 8%. If input costs do not rise, the uplift would be close to 10%.
The bank described its CY28E assumptions as relatively conservative, using about a 5% increase in ASP and about a 2.5% increase in input costs. That pricing sensitivity runs through the broader earnings model.
BofA raised its ASP forecasts by about 5% across deep ultraviolet lithography, or DUV, extreme ultraviolet lithography, or EUV, and the installed base management business. For low-NA EUV, the ASP forecast was lifted to €2.65 million from €2.53 million, a 4.7% increase.
Under higher pricing scenarios, gross margin also moves up. BofA estimated that with ASP increases ranging from 5% to 20%, CY28E gross margin would rise from 58.2% to a range of 59.2% to 61.7%. In a 20% pricing scenario, earnings would be 33% higher.
EUV shipment forecast raised to 120 units
BofA increased its CY28E EUV shipment forecast to 120 units from 110, while leaving CY27E unchanged at 86 units. The report attributed the increase to ASML’s gradual capacity expansion, the reallocation of factory space toward low-NA EUV, and shorter lead times from key suppliers such as Zeiss.
The forecast for high-NA EUV shipments was left unchanged at 10 units. For 2028E, BofA expects 68 low-NA EUV systems for logic chips and 52 for DRAM.
The forecast for dry system shipments was raised to 210 units from 190. Revenue tied to that segment was increased to €2.945 billion from €2.675 billion.
System revenue and margin assumptions were also revised higher
BofA expects system revenue to grow 40% in CY26E, 31.9% in CY27E, and 36.2% in CY28E. Over the same period, wafer fabrication equipment revenue is projected to grow 33%, 34%, and 30%.
The report said ASML’s gross margin is 6.5 percentage points above the global peer average, while the peer average is only 1.3 percentage points higher. BofA said that gap is a key reason it expects ASML to deliver a 50% earnings CAGR from 2025 to 2028E, the highest among global peers.
China mix falls, non-China revenue is expected to fill the gap
BofA expects ASML’s China revenue to decline from €9.52 billion in 2025 to €8.675 billion in 2026E, then recover to €9.789 billion in 2027E and €11.602 billion in 2028E. Even with the recovery in absolute terms, China’s share of revenue is projected to fall from 29% to 15%.
Non-China revenue is expected to rise from €23.15 billion in 2025 to €64.95 billion in 2028E. BofA sees that increase as the main source of offset.
Installed base management revenue is projected to increase from €8.193 billion in 2025 to €14.994 billion in 2028E, with 19% growth in CY28E. The report said upward revisions to both system and non-system revenue provide the structural support for the higher earnings forecast.
Valuation multiple cut to 25x, while risks remain
BofA lowered its valuation multiple to 25x CY28E EV/EBITDA from 27x, even as it raised forecasts and targets. The bank 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 target price is based on 25x CY28E EV/EBITDA.
In BofA’s model, ASML would generate CY28E revenue of €76.571 billion, an EBIT margin of 49.5%, a net margin of 41.6%, and free cash flow of €34.471 billion. Those figures depend on three conditions: pricing is implemented, EUV shipments arrive on schedule, and non-China demand fills the gap.
The report also said uncertainty around the MATC Act could be resolved before year-end. BofA said that factor is already largely reflected in the share price and expects implementation details to become clearer after the U.S. midterm elections and defense budget negotiations.
BofA listed the main downside risks as delays in EUV volume production, gross margin coming in below expectations, slower semiconductor capital spending, China export restrictions, and longer-term challenges to ASML’s monopoly position from emerging lithography startups.
Based on the bank’s model, the €85.2 earnings forecast corresponds to a 5% ASP increase. If pricing does not materialize in 2028, if 120 EUV systems are not delivered on time, or if non-China revenue does not rise from €23.15 billion to €64.95 billion, the upgrade would need to be revisited.
Source note
This article is a整理与解读 by Chaoxiang Research of a third-party brokerage report from Bank of America dated Oct. 6, 2026, combined with public market information. The ratings, price targets, earnings forecasts, and related judgments cited in the piece are the views of the brokerage analysts and represent only the position of their institution, not that of Chaoxiang Research. They do not constitute investment advice.
Markets carry risk, and decisions should be made independently. This article should not be used as the basis for buying or selling any security.
