Morgan Stanley Cuts ASML Price Target Amid Near-term China, Margin Risks

01:17 AM EDT, 09/09/2026 (MT Newswires) -- Morgan Stanley reduced its price target for ASML (ASML.AS), flagging overhangs for the Dutch chip equipment manufacturer through the year-end. "We retain our Overweight rating on ASML, where [dynamic random-access memory] and logic demand continue to support the medium-term margin expansion story, but near-term overhangs around China, capacity and margins are likely to constrain the multiple; we leave estimates unchanged and lower our [price target] to EUR1,700 from EUR1,930 on a 30x P/E multiple (at the lower end of the peak cycle multiple range) versus 35x previously," according to a Tuesday note focused on European semiconductors. The research firm noted concerns about potential restrictions from the US' MATCH Act, Chinese extreme ultraviolet tool self-sufficiency, and ASML's ability to meet its full-year 2028 EUV capacity targets. While Morgan Stanley sees "limited" immediate risk to its estimates, analysts expect China sales risks and capacity debates to pressure investor sentiment into the end of the year. "Margin expansion or margin dilution? Although we think ASML is a margin expansion story, we expect some bears to float the risk of margin dilution from [high numerical aperture] tool deployment. We disagree that this will be an imminent margin headwind, and instead find the pricing power debate more compelling. However, we acknowledge this debate could weigh on near-term sentiment," the note said.