Amid Inflationary and Recessionary Fears, Shares of ASML Look Undervalued After Solid Q2 Results

ASML reported second-quarter results above our expectations and management’s guidance. The firm remains heavily impacted by supply chain challenges, though ASML has been utilizing fast shipments (systems that ship to a customer as soon as possible but with delayed revenue recognition) to help mitigate the chip shortage and meet customer needs. Management now expects EUR 2.8 billion in sales to be deferred to next year (up from EUR 1 billion last quarter). Consequently, 2022 revenue growth is expected to be 10% (down from 20% previously). We note the total shipment volume for ASML in 2022 is relatively unchanged and expect most of the deferred revenue to be recognized in 2023.