ASML slips even as Susquehanna upgrades following analyst day
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ASML Holding (NASDAQ:ASML) shares slipped in premarket trading on Monday even as investment firm Susquehanna upgraded the chip equipment maker after it held its analyst day last week.
Analyst Mehdi Hosseini moved his rating to positive with a $850 price target, noting that shares have risen roughly 38% since early October, but are still down 32% since November 2021.
"We have gained incremental confidence in the long-term financial road map," Hosseini wrote in a note to clients.
Hosseini added that not only could longer equipment lead times "overcome" a potential recession in 2023, but "increased competition among key customers (for leading edge) and increased diversification of end-market demand drivers (for trailing edge)" could have ASML (ASML) grow EBITDA at a compound annual growth rate of 30% between 2022 and 2025 and 20% from 2022 to 2030. 
ASML (ASML) shares fell 0.8% to $571.66 in premarket trading.
Hosseini noted that ASML (ASML) has a few key growth drivers going for it, including the fact there is increased competition among its three largest customers - Taiwan Semiconductor (TSM), Samsung (OTCPK:SSNLF) and Intel (INTC)- for leading edge 3nm chips. Hosseini pointed out that the aforementioned companies account for 75% of ASML's (ASML) revenues.
The analyst also said that the 3 nm node is on track to become the biggest node compared to 5nm and 7nm for end-market demand, as end markets are increasingly diversifying to include cloud applications. 
Hosseini also discussed out that electric vehicles are expected to become a "key" leading-edge end market for both compute and memory, as well as become an additional driver for trailing-edge demand. Lastly, Hosseini pointed out there is expected to be a "continued increase" in ASML's (ASML) system average selling price as both the cost and benefit improves. 
Last week, ASML Holding (ASML) Chief Executive Peter Wennink said that if Chinese semiconductor companies are unable to expand capacity past where they are currently, it would not alter the chip equipment firm's outlook for 2030 "that much."

Analysts are largely positive on ASML Holding (ASML). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Seeking Alpha's quant system, which consistently beats the market, also rates ASML a HOLD.