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Investing.com - Needham raised its price target on ON Semiconductor (NASDAQ:ON) to $58.00 from $50.00 on Monday, while maintaining a Buy rating on the stock. The company, currently trading at $47.94, has shown strong momentum with a 12.3% return over the past six months. According to InvestingPro data, 13 analysts have recently revised their earnings estimates upward for the upcoming period.
The research firm cited ON Semiconductor’s solid results and guidance that exceeded Street expectations, suggesting the company is approaching a recovery phase despite management’s conservative forward forecast. The company maintains a "GOOD" overall financial health score, with particularly strong metrics in cash flow and profitability, according to InvestingPro analysis.
Needham highlighted that ON Semiconductor’s automotive segment reached a trough in the second quarter of 2025, with management guiding for low-single-digit percentage sequential growth in the third quarter, compared to Needham’s previous estimate of a 0.4% quarter-over-quarter decline.
The firm also noted that following recent capacity reductions, ON Semiconductor now targets "full" utilization in the low-90% range, up from the mid-80% range previously, while its Industrial business grew 1.6% quarter-over-quarter and is forecast to grow at a low-single-digit percentage in the third quarter of 2025.
Needham’s new $58 price target is based on 15 times its calendar year 2027 earnings per share estimate of $3.90, with the firm acknowledging that business repositioning and the exit of non-core product lines will lead to a $200-300 million revenue impact in calendar years 2025 and 2026. The stock currently trades at a P/E ratio of 32.8x, with robust liquidity demonstrated by a current ratio of 4.95. InvestingPro subscribers can access over a dozen additional key insights and a comprehensive analysis of ON Semiconductor’s valuation metrics in the Pro Research Report.
In other recent news, ON Semiconductor reported its second-quarter 2025 earnings, meeting market expectations with an earnings per share (EPS) of $0.53. The company achieved a revenue of $1.47 billion, which slightly surpassed the anticipated $1.45 billion. This represents a 1.6% increase quarter-over-quarter but a 15.4% decrease year-over-year. Despite the revenue beat, analysts have adjusted their outlooks. Mizuho (NYSE:MFG) lowered its price target for ON Semiconductor to $68.00 from $72.00, citing soft margins, but maintained an Outperform rating. Stifel reiterated a Hold rating with a $50.00 price target, noting early signs of stabilization. Meanwhile, Goldman Sachs maintained its Neutral rating with a $60.00 price target. These updates reflect the company’s recent performance and analysts’ varied perspectives on its future.
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