TD Cowen analyst Joshua Buchalter has maintained their bullish stance on ON stock, giving a Buy rating yesterday.
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Joshua Buchalter has given his Buy rating due to a combination of factors including ON Semiconductor’s strategic positioning and future growth potential. The company has shown a modest earnings beat, and while the immediate market reaction was subdued, it performed better than its peers during this earnings season. The increase in utilization rates to 74% suggests a positive trend, although investors are looking for more consistent improvements in gross margins to exceed 40%.
Additionally, the company’s focus on stabilizing auto and industrial demand, along with its strategic moves in the AI datacenter power business, positions it well for future growth. ON Semiconductor’s new offerings, such as the vGaN products with high power density, are expected to drive revenue growth in the coming years. The company’s approach to managing its inventory and the potential for significant EPS accretion if execution aligns with expectations further supports the Buy rating.
In another report released yesterday, Benchmark Co. also maintained a Buy rating on the stock with a $60.00 price target.