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Investing.com - Mizuho (NYSE:MFG) has reduced its price target on ON Semiconductor (NASDAQ:ON) to $68.00 from $72.00 while maintaining an Outperform rating on the stock. The semiconductor company, currently trading at $47.94 with a market capitalization of $20 billion, is trading below its InvestingPro Fair Value, suggesting potential upside opportunity.
The semiconductor company reported solid results for the June quarter and guided September quarter revenue slightly higher quarter-over-quarter, just ahead of the $1.50 billion consensus, though gross margins, currently at 39.85%, are expected to decline by 10 basis points. InvestingPro analysis shows the company maintains a strong financial health score, with 13 additional insights available to subscribers.
Mizuho noted that ON Semiconductor sees its automotive and industrial segments bottoming out, with automotive expected to grow low-single-digits quarter-over-quarter in the September quarter despite light vehicle production declining 4% in the same period.
The company’s "Fab Right" strategy is expected to deliver a 200 basis point improvement in gross margins, while factory utilization remained flat at approximately 68% in the June quarter and is projected to be flat to slightly higher in the September quarter.
ON Semiconductor also reported that inventory is trending lower, though distribution inventory increased by 0.7 weeks to 10.8 weeks against a target range of 9-11 weeks, while its new Treo platform funnel doubled quarter-over-quarter and China silicon carbide revenue also doubled with new product launches.
In other recent news, ON Semiconductor reported its second-quarter 2025 earnings, with revenue reaching $1.47 billion. This marks a 1.6% increase from the previous quarter but a 15.4% decrease compared to the same period last year. The revenue figure slightly exceeded expectations, surpassing the anticipated $1.45 billion. The company also reported earnings per share (EPS) of $0.53, which met market forecasts. Stifel reiterated its Hold rating on ON Semiconductor, maintaining a price target of $50.00, noting "continued signs of early stabilization" in the market. Goldman Sachs also reiterated its Neutral rating, setting a price target of $60.00. These updates reflect the recent developments surrounding ON Semiconductor and its financial performance.
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