Morgan Stanley analyst Joseph Moore maintained a Hold rating on ON Semiconductor (ON – Research Report) today and set a price target of $39.00.
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Joseph Moore’s rating is based on a combination of factors that suggest a cautious outlook for ON Semiconductor. He notes that the company’s revenue and earnings per share estimates for 2026 are lower than market expectations, indicating a conservative stance on the company’s potential growth. This is partly due to anticipated challenges in gross margin improvements, where Moore expects only a modest increase compared to the more optimistic market view.
Additionally, Moore highlights the lack of significant growth drivers for ON Semiconductor, with the company expected to grow only slightly ahead of the automotive semiconductor market. The absence of strong catalysts, coupled with competitive pressures in areas like image sensors, contributes to the Hold rating. Furthermore, while the company is engaging in share buybacks, Moore suggests that without clear signs of improvement in gross margins, the stock is unlikely to see a significant re-rating in the near term. Thus, the current valuation appears to reflect these considerations, leading to the Hold recommendation.
In another report released on May 6, Craig-Hallum also reiterated a Hold rating on the stock with a $45.00 price target.