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Kelleher raised his price target on ASML Holding N.V. by 31.4% following the release of the company's Q4 and FY 2022 earnings report on 2023/01/25.

ASML returned better-than-expected Q4 numbers, the analyst told investors.

"The company's revenue recognition has been impacted by the timing of 'fast-shipment' systems*," Kelleher noted.

Further, as supply scarcity continues to moderate, the analyst said "additions to productive capacity along with ASML's improved ability to fulfill orders should drive faster revenue growth."

Within the "extreme ultraviolet and deep ultraviolet lithography" market,** ASML offers "unmatched leadership," Kelleher said.

His price target raise is also supported by the company's "favorably valued" shares, the analyst concluded.

* By which the analyst presumably means that the arrival of fast-shipping management systems opens up a new market for ASML's high-performance microchips.

** See, for example, here: "As a supplier of crucial equipment for the production of high-performance microchips, ASML Holding, a Dutch manufacturer of chip-making equipment, signed a deal to create a lithography cluster in South Korea by investing 240B won ($202M) by 2024. ASML provides extreme ultraviolet and deep ultraviolet lithography systems to South Korean semiconductor companies.

ASML Holding reported:

For Q4 2022:

• EPS of €4.60 which beat, by 4.8%, Q4 2021's €4.60
• Revenue of €6.43B which, beat by 29%, Q4 2021's €4.985.6B.
• Net bookings of €6.3B.

For FY 2022:

• EPS of €14.14 which missed, by 1.5%, FY 2021's €14.36.
• Revenue of €21.2B which beat, by 14%, FY 2021's €18.6B.
• Net bookings of €30.67B which beat, by 16.9%, FY 2021's €26.24B.

Management guided:

For Q1 2023:

• Revenue of €6.1B to €6.5B.
• Gross margin of 49% to 50%.
• R&D costs of ~ €965M.
• SG&A costs of ~€285M.

For FY 2023:

• Revenue growth of more than 25%.

President & CEO Peter Wennink commented: "We continue to see uncertainty in the market caused by inflation, rising interest rates, risk of recession, and geopolitical developments related to export controls.

"However, our customers indicate that they expect the market to rebound in the second half of the year. Considering our order lead times and the strategic nature of lithography investments, demand for our systems, therefore, remains strong.

"For 2023, ASML expects continued strong growth with a net sales increase of more than 25% and a slight improvement in gross margin, relative to 2022."