In a report released yesterday, Tristan Gerra from Robert W. Baird maintained a Hold rating on ON Semiconductor (ON – Research Report), with a price target of $34.00.
Tristan Gerra has given his Hold rating due to a combination of factors impacting ON Semiconductor’s performance. The company is facing several specific challenges, including the non-renewal of long-term supply agreements, ongoing product pruning, and issues related to silicon carbide (SiC) revenue. These factors contribute to a less favorable comparison of ON’s automotive revenue against its peers in the first and second quarters.
Additionally, the company’s gross margin outlook remains flat for the upcoming quarters, with potential catalysts from lower depreciation in the fourth quarter. However, incremental pricing pressures are affecting the second quarter, and utilization rates are expected to decline slightly. Despite efforts to manage costs through workforce reductions and manufacturing footprint cuts, the impact of these headwinds leads to a cautious outlook, justifying the Hold rating.
Based on the recent corporate insider activity of 48 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of ON in relation to earlier this year.