On Semiconductor (ON) plunged 15.6% on Monday after the company reported mixed Q2 results and issued a lackluster profit outlook for the third quarter of 2025, which indicated continued pressure on margins. The automotive chipmaker is facing challenges due to a slowdown in battery electric vehicle (EV) sales amid macro uncertainty, tariff woes, and elevated interest rates. Given the dismal earnings outlook, several analysts lowered their price target for ON stock, with Bank of America downgrading it to a Hold from Buy.
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On Semi’s Mixed Q2 Performance and Weak Profit Outlook
On Semiconductor makes silicon carbide chips that are used in EVs. The company stated that it has not yet seen a broad-based recovery in the automotive end-market and expects only low single-digit growth in the third quarter. On Semi reported Q2 revenue of $1.47 billion, surpassing the consensus estimate of $1.45 billion. However, Q2 revenue declined 15% year-over-year. The company’s adjusted earnings per share (EPS) of $0.53 was in line with the Street’s estimate.
Looking ahead, On Semi expects its third-quarter adjusted EPS to be between $0.54 and $0.64, compared to the Street’s average estimate of $0.59. The company projects Q3 revenue in the range of $1.465 billion to $1.565 billion against the analysts’ consensus estimate of $1.5 billion.
Analysts’ Reactions to On Semiconductor’s Q2 Results
Following the Q2 print, Citi analyst Christopher Danely lowered the price target for ON stock to $54 from $60, while maintaining a Hold rating. The top-rated analyst noted that results were roughly in line with the Street’s consensus, but gross margins outlook missed estimates, with the Silicon Carbide business remaining dilutive. Danely added that while On Semi continues to exit low-margin businesses, he expects the company’s gross margins to remain under pressure, with slowing growth in the lower-gross margin Silicon Carbide business.
Meanwhile, Bank of America analyst Vivek Arya downgraded On Semiconductor stock to Hold from Buy and slashed the price target to $56 from $70. The 5-star analyst stated that the company’s Q2 earnings painted a picture of a “muted” sales recovery and continued weakness in U.S. and European auto markets.
Arya added that results also indicated increasing reliance on China EVs and limited to no gross margin recovery for several quarters. While the analyst still believes that On Semiconductor “offers the most EPS leverage in the industry” and is pursuing “an interesting data center opportunity,” he expects the stock to be potentially range-bound due to the recovery timing and the view that data center growth “isn’t likely to shine” until the second half of 2026.
Is On Semi a Good Stock to Buy?
Overall, Wall Street has a Moderate Buy consensus rating on On Semiconductor stock based on 12 Buys and 15 Holds. The average ON stock price target of $59.96 indicates about 25% upside potential.
These ratings and price targets could change further based on the reactions from more analysts.
