Analyst Harlan Sur of J.P. Morgan maintained a Hold rating on ON Semiconductor, with a price target of $56.00.
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Harlan Sur has given his Hold rating due to a combination of factors influencing ON Semiconductor’s current and future performance. The company reported solid results for the June quarter, with growth in the automotive and AI/datacenter segments offsetting weaker performance in the industrial sector. However, the outlook for the September quarter remains cautious, with only low single-digit growth expected in the auto and industrial businesses.
Despite positive developments in the AI datacenter and automotive sectors, including strong growth in the China EV pipeline, the overall industrial recovery is slow, and there is volatility in orders from American and European auto OEMs. Additionally, ON Semiconductor’s strategic repositioning and exits from non-core businesses are expected to create a 5% revenue headwind by 2026. These factors, combined with muted gross margin recovery and increased distribution inventory levels, contribute to the Hold rating, as the potential upside to the price target appears limited.
According to TipRanks, Sur is a top 100 analyst with an average return of 25.1% and a 67.90% success rate. Sur covers the Technology sector, focusing on stocks such as Nvidia, Marvell, and Micron.
In another report released yesterday, B.Riley Financial also maintained a Hold rating on the stock with a $58.00 price target.