U.S. stock futures edge higher; earnings season continues
Investing.com - CFRA has upgraded ON Semiconductor (NASDAQ:ON) from Buy to Buy while significantly raising its price target from $42.00 to $75.00. Currently trading at $56.60, the company commands a market capitalization of $23.6 billion and maintains a GOOD financial health score according to InvestingPro data.
The upgrade reflects CFRA’s belief that ON Semiconductor’s margins will recover through 2027, potentially exceeding 50% gross margins by that point, compared to 37.5% seen in Q2. The company’s current gross margin stands at 39.85%, with management actively buying back shares to enhance shareholder value. This margin improvement is expected to drive earnings per share potentially above $5 by 2027.
CFRA maintains its above-consensus earnings per share estimates of $2.45 for 2025 and $3.22 for 2026. The firm projects the first half of 2026 will mark a cyclical and margin trough for ON Semiconductor. Notably, InvestingPro reveals that 13 analysts have recently revised their earnings estimates upward, suggesting growing confidence in the company’s outlook.
The new price target is based on a price-to-earnings ratio of 15 times CFRA’s 2027 EPS view of $5.00, which is below semiconductor peers but near ON Semiconductor’s 10-year historical forward average of 15.1x.
CFRA remains confident in ON Semiconductor’s content gain potential related to electric vehicles and Advanced Driver Assistance System adoption, with rising utilization and volume expected to be the main components of a margin inflection in the second half of 2025 and into 2026.
In other recent news, ON Semiconductor has been the focus of analysts with varying opinions. Mizuho (NYSE:MFG) raised its price target for ON Semiconductor to $72.00, citing the company’s strong positioning in automotive markets and industrial growth prospects. The firm highlighted the potential of ON’s TREO platform to generate significant revenue by 2030. Meanwhile, Cantor Fitzgerald maintained a Neutral rating with a $55.00 price target, noting both positive gross margin tailwinds and concerns over long-term margin levels.
Medirom Healthcare Technologies announced the approval of new performance-based stock options as part of its 2024 Equity Incentive Compensation Plan. These options, set to be granted in 2025, require the company to achieve specific revenue targets to be exercisable. VEON Ltd (AS:VON). released its unaudited financial results for Q1 2025, providing investors with updated financial performance information. Additionally, MINISO Group filed disclosure returns related to recent share transactions, fulfilling standard regulatory requirements for transparency.
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