BMO Capital analyst Ambrish Srivastava downgraded ON Semiconductor to Market Perform from Outperform after its Q4 earnings miss with a price target of $20, down from $28. The analyst notes that his prior bullish thesis was predicated on the company's ability to improve its margin structure, but after its latest Q4 miss and forecast of continued gross margin pressure, he has little confidence that the management can deliver on its guidance. Srivastava adds that he is concerned about what other "dormant" product lines may exist in ON Semiconductor's portfolio, compressing margins down the road.
BofA raised the firm's price target on Texas Instruments (TXN) to $190 from $175 and keeps a Neutral rating on the shares. TI's small Q1 beat and inline but sequentially rising Q2 sales guidance, "while modest, potentially marks a recovery inflection in industrial chip demand," with positive read-across for U.S. peers such as Analog Devices (ADI), Microchip (MCHP), NXP Semiconductors (NXPI) and On Semiconductor (ON), the analyst tells investors. However, despite an expected recovery, TI's sustained high capex intensity could keep reported calendar year 2024-26 pro-forma EPS below $6 per share, the analyst added.
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Wells Fargo lowered the firm's price target on On Semiconductor (ON) to $95 from $110 and keeps an Overweight rating on the shares ahead of quarterly results. The firm anticipates On to deliver a Q2 guide slightly below expectations as it adjusts to Tesla-specific (TSLA) production softness specific to image sensor and SiC sales.