ASML: share price falls, Morgan Stanley sees end of cycle

(CercleFinance.com) - ASML shares posted the second biggest drop in the AEX index on the Amsterdam Stock Exchange on Friday, after Morgan Stanley downgraded the semiconductor equipment manufacturer, deeming it to be at the end of its cycle.


At around 3.45pm, ASML was down 3.8%, bringing its decline to over 28% since its all-time high in July.

In a note, Morgan Stanley believes that European chip equipment specialists, including ASML, are exposed to a slowdown in capital spending.

The research firm says it sees a risk/reward profile representative of an end-of-cycle period, citing disappointing production capacity at Intel, a slowdown in demand for DRAM memory and uncertainties surrounding the Chinese market as potential dangers.

As a result, the analysts have lowered their recommendation to 'weighted in line' from 'overweight', while lowering their price target to 800 euros from 925 euros.

Earlier this week, Deutsche Bank had reduced its price target on the stock from 1,100 to 950 euros, also citing fears about China and Intel's situation, while maintaining its buy recommendation on the stock.

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