ON Semi: Recovery Seen Slower Than Expected

ThinkEquity’s Robert Burleson Friday trimmed his estimates on ON Semiconductor (ONNN), asserting that “recovery at ONNN is occurring more slowly than expected.” He maintained his Accumulate rating and $10 price target.

Burleson dropped his 2007 EPS estimate to 77 cents a share from 80 cents; his revenue estimate goes to $1.56 billion from $1.58 billion. He wrote in a research note:

Lead times in weeks have decreased for certain products from healthy double-digits to mid-single digits. We think lead times have come down more for power MOSFETS (in case you are wondering what they are, there is a remarkably detailed Wikipedia article on MOSFETS) than the corporate average. Our distribution checks in Asia show slow sell-through for commodity analog and discretes, higher inventories, and generally greater availability across multiple suppliers including ONNN, Fairchild (FCS) and others.

ON Friday was down 31 cents at $9.52.

ONNN 1-yr chart