"For the first time in history," annual guidance issued ahead of schedule! JPMorgan maintains an "Overweight" rating on ASM International (ASMIY.US), and earnings expectations may continue to be revised upward.

JPMorgan, in its latest research report, maintained an "Overweight" rating on Dutch semiconductor equipment manufacturer ASM International (ASMIY.US) with a target price of EUR1,174. The bank believes the biggest highlight of ASMI's Q3 report is not the quarterly data itself, but the company's "surprising" decision to issue FY2027 guidance before Q4 has even begunthe first time in its history it has previewed the next fiscal year's performance this early. In JPMorgan's view, this rare move sends two key signals: first, the company's visibility into future orders is "very strong"; second, given ASMI's historically cautious guidance style, the figures provided early are likely conservative, leaving room for upward revision. On this basis, the bank judges that this guidance will drive the market to revise up ASMI's FY2027 earnings expectations by a "low double-digit percentage," and expects the company to continue reiterating its goal of "outperforming global wafer fab equipment (WFE) industry growth"even though its guided 34% revenue growth is slightly below JPMorgan's forecast of 38% WFE spending growth for 2027. JPMorgan's confidence is rooted in its assessment of ASMI's competitive position. Analyst Sandeep Deshpande noted in the report that ASMI has established a dominant position in the atomic layer deposition (ALD) equipment market for logic chips, with major global advanced-process manufacturers having adopted its equipment in 5nm, 3nm, and 2nm processes; more critically, there is a structural dividend from technology evolution. As DRAM shifts toward logic-like high-k metal gate and even 4F2 architectures, and logic chips advance toward backside power delivery networks and the 1.4nm node, the layer count and complexity of ALD and epitaxy (Epi) processes will continue to increasethis is the underlying logic behind ASMI's ability to outperform WFE industry growth over the long term. Additionally, the bank noted ASMI's significant expansion in epitaxy equipment market share over the past four years, as well as its improved position in the memory market. ASMI's Q3 revenue of EUR1.16 billion and EBIT of EUR387 million both beat expectations, with gross margin of 52% exceeding consensus by 81 basis points, driven by acceleration in advanced logic/foundry, first-time revenue contribution from 1.4nm, and strong memory growthreflecting high structural quality. JPMorgan also flagged that the company's current consensus FY2027 gross margin expectation of 51.1% "looks incorrect"under guidance of substantial revenue growth, fixed-cost dilution should push gross margin to at least slightly above the FY2026 guidance level of 52%, implying earnings revisions could exceed market expectations. On valuation: while raising its 2028 earnings forecasts, the bank proactively cut its valuation multiple from 32.8x to 28.5x, citing that "forecasts have begun to reflect upside." This combination of "raising earnings, cutting multiples" effectively leaves a margin of safety for its view.