ON Semiconductor Delivers Blowout Quarter; Shares Soar 11.7%

ON Semiconductor Corporation (ON) reported blowout second-quarter results driven by continued momentum for its products. Shares soared 11.7% to close at $43.64 on August 2.

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ON manufactures semiconductor components for power, analog, sensor, and connectivity solutions. Shares have gained 105.5% over the past year. (See ON Semiconductor stock charts on TipRanks)

The company reported earnings of $0.63 per share, increasing a whopping 425% compared to the prior-year period, and outpaced analysts’ estimates of $0.49 per share.

Revenue climbed 38% year-over-year to $1.67 billion and surpassed the Street’s estimates of $1.62 billion.

Hassane El-Khoury, President and CEO of the company, said, “We continue to see accelerating demand for our products in our strategic automotive and industrial end-markets. As we continue to drive operational efficiencies in our manufacturing sites, we expect to see incremental supply and revenue growth in the second half of 2021.”

For the third quarter, the company projects revenue and earnings to fall in the range of $1.66 – $1.76 billion and $0.68 – $0.80 per share, respectively.

The Street’s estimates for revenue and earnings are pegged at $1.61 billion and $0.51 per share, respectively.

Following the results, Susquehanna analyst Christopher Rolland reiterated a Buy rating on the stock while lifting the price target to $57 (30.6% upside potential) from $48.

Rolland said, “ON Semi reported better than expected results and guidance, driven by strong Automotive, Industrial, and Computing revenue, three areas of strategic management focus…While we had strong conviction in this turnaround, it appears to be progressing even faster than our optimistic expectations.”

The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 8 Buys, 1 Hold, and 1 Sell. The average ON Semiconductor price target of $50.30 implies 15.3% upside potential to current levels.