Analyst Christopher Danely of Citi reiterated a Hold rating on ON Semiconductor, retaining the price target of $54.00.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Christopher Danely’s rating is based on several observations regarding ON Semiconductor’s recent performance and future outlook. The company reported solid quarterly results with sales exceeding expectations, primarily driven by the Auto and Industrial sectors. However, despite these positive results, the guidance for the next quarter aligns closely with market expectations, indicating limited upside potential.
Danely notes that the gross margin remains under pressure due to the slower growth in the Silicon Carbide (SiC) business, which has a lower margin. This ongoing margin pressure is a key factor in maintaining a Hold rating. Additionally, while revenue and earnings estimates have been adjusted upwards, the overall valuation remains constrained by the challenges in the SiC market. As a result, Danely reiterates a Neutral stance with a target price of $54.00.
In another report released yesterday, Robert W. Baird also maintained a Hold rating on the stock with a $56.00 price target.