In a report released today, David Williams from Benchmark Co. maintained a Buy rating on ON Semiconductor (ON – Research Report), with a price target of $60.00.
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David Williams has given his Buy rating due to a combination of factors including ON Semiconductor’s compelling valuation and strategic business realignment. Despite a weaker-than-expected outlook and recent challenges in gross margin and sales, Williams believes the company’s transformation efforts have demonstrated inherent leverage that remains intact. The firm’s business realignment is poised to drive further expansion as the macroeconomic environment stabilizes.
ON Semiconductor’s shares are trading at a significant discount compared to its peers, which, coupled with its expanded portfolio and AI-related exposure, enhances its attractiveness. Moreover, while the current quarter’s guidance presents a more substantial decline in automotive revenue compared to competitors, the company’s strategic changes, such as the fab-right strategy, are expected to yield long-term benefits. Williams also highlights management’s aggressive cost-cutting and capacity optimization measures, which should enhance free cash flow and support the firm’s commitment to shareholder returns.
Williams covers the Technology sector, focusing on stocks such as D-Wave Quantum, Belden, and Maxlinear. According to TipRanks, Williams has an average return of 25.6% and a 51.67% success rate on recommended stocks.
In another report released yesterday, Wells Fargo also maintained a Buy rating on the stock with a $60.00 price target.