ON Semiconductor Q3: Remain Soft In Automotive And Industrial
Summary
- I reiterate a “Strong Buy” rating for ON Semiconductor Corporation with a one-year target price of $120 per share, despite current market challenges.
- ON Semiconductor faces a downcycle with a 19.2% revenue decline and a 37.3% drop in adjusted operating profits due to weak end-market demands.
- Long-term recovery is expected, driven by electrification trends and growth in the SiC market, with a forecasted 10% annual revenue growth from FY25 onwards.
- Key risks include volatility in the Chinese automotive market and pricing pressures from inventory destocking activities among smaller competitors.
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