In a report released yesterday, Joshua Buchalter from TD Cowen maintained a Buy rating on ON Semiconductor (ON – Research Report), with a price target of $44.00.
Joshua Buchalter has given his Buy rating due to a combination of factors that highlight both challenges and opportunities for ON Semiconductor. Despite facing issues such as high inventory levels and underutilized fabrication plants, which have pressured margins, the company is strategically navigating these hurdles. Buchalter acknowledges that ON Semiconductor is making tactical price concessions to maintain market share and leverage its improved cost structure, even though this deviates from previous management narratives.
Furthermore, ON Semiconductor’s commitment to returning 100% of free cash flow to shareholders is seen as a positive aspect, especially as the company moves past its recent phase of elevated investments. While the short-term outlook may appear challenging, Buchalter sees long-term potential in the company’s restructuring efforts and its exposure to secular growth trends. These factors contribute to a structurally healthier company, providing a valuation backstop that supports the Buy rating, despite the near-term headwinds.
According to TipRanks, Buchalter is an analyst with an average return of -12.3% and a 29.55% success rate. Buchalter covers the Technology sector, focusing on stocks such as Nvidia, Intel, and Lattice Semiconductor.
In another report released yesterday, Mizuho Securities also maintained a Buy rating on the stock with a $52.00 price target.