On Thursday, Citi updated its assessment of ASM International NV (AS:ASMI) (ASM:NA) stock, increasing the firm's price target from EUR700.00 to EUR720.00. The investment bank continues to recommend a Buy rating. The adjustment follows ASM International's recent first-quarter results and the company's positive outlook for the second half of the year.
The rationale behind Citi's decision is tied to the anticipated structural growth within the semiconductor industry, as advancements progress towards 2nm technology and high bandwidth memory (HBM). Citi's analyst highlighted the increased visibility into the strong order forecast for the latter part of the year, especially for 2nm gate-all-around (GAA) technology investments. This outlook aligns with sentiments expressed by industry leaders TSMC and ASML (AS:ASML).
ASM International's recent performance has been marked by strong execution, resulting in high gross margins and record revenue from China. Citi's revised forecast expects some of this financial outperformance to continue, leading to an uplift in gross margin (GM) expectations for ASM International.
The investment bank's positive stance is further supported by ASM International's position in the market, as the company benefits from the growth in logic and memory driven by artificial intelligence (AI). Citi's forecasts remain ahead of the consensus, and the bank has made only modest positive revisions to its estimates following the first-quarter financial results. The new price target of EUR720 reflects Citi's confidence in ASM International's ongoing success and future prospects in the semiconductor industry.
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