ASML Holdings cut at Bernstein on softening demand

ASML Holdings (AS:) was cut to Market-Perform at Bernstein on Friday, with analysts lowering the price target to $785 from $810 per share.

The analysts told investors in a note that the downgrade is based on softening demand for 2023 and into 2024.

“We continue to like the fundamentals and growth” for ASML, they said. “However, we believe the risk from softening demand for leading-edge logic/foundry and ongoing memory weakness now outweighs the upside.”

“Despite a backlog of EUR 38B, ASML saw a softening of demand and increasing customer caution based on the potential for a more prolonged cyclical downturn,” the analysts added.

They explained that the strong pull-forward of DUV demand in 2023 — especially from China — combined with weakness in EUV orders resulted in the firm stepping to the sidelines and downgrading ASML.