Record Q3 sales and a higher 2026 floor confirm the AI lithography ramp. I model $60.60 of 2027 EPS at 30 times, an $1,818 stock, a market-like return from $1,649.
Key points
- €44.5 billion 2026 sales at the new midpoint, versus €32.7 billion in 2025.
- €11.7 billion Q3 sales and 57.5% gross margin, both above July guidance.
- 30 times my 2027 EPS of $60.60 produces an $1,818 target, 10% above $1,649.
The call
The $1,649 price requires about $55 of 2027 EPS at 30 times, or €19 billion of net profit on 378 million shares. That is a 24% sales step from the new 2026 midpoint and a 56% gross margin.
I expect that path. Memory and logic are adding tools together, 2027 Low-NA is still near 85 systems, and agreed price increases start to show in 2027. The market is about right after today's drop: extra output is visible, so the multiple should not expand.
Quarterly sales (€ billions)Company US GAAP results and Q4 guidance midpoint, October 14 2026
Valuation
| Item | Figure |
|---|
| 2027 sales (my estimate) | €55 billion |
| Gross margin | 56% |
| 2027 net income | €19.8 billion |
| 2027 EPS | $60.60 |
| Multiple | 30 times |
| 12-month target | $1,818 |
Thirty times is a step below the 32 times I used last week because High-NA mix and ramp costs still cap 2027. Upside is 2028 orders converting at the new prices; downside is a China cut. The 10% gap is too tight for a buy.
Low-NA EUV output (systems)Company guidance October 14 2026; 2028 is under investigation, not a commitment
Risks
- Export rules on China, still about 20% of sales, could tighten; watch Dutch and U.S. notices.
- Upgrade sales, which lifted Q3 margin, fade faster than new options replace them; watch installed-base versus systems mix.
- Working-capital swings after the €11.4 billion Q3 free-cash spike; watch receivables versus sales.
What would change my mind
A 2026 sales miss below €44 billion or a cut to 2027 Low-NA capacity near 85 tools would force a lower multiple.