Tristan Gerra, an analyst from Robert W. Baird, maintained the Hold rating on ON Semiconductor (ON – Research Report). The associated price target remains the same with $48.00.
Tristan Gerra has given his Hold rating due to a combination of factors impacting ON Semiconductor. The company’s recent proposal to acquire Allegro Microsystems highlights its strategy to enhance its automotive sector presence amidst low growth in its core business. This acquisition, while potentially beneficial, remains uncertain as no agreement has been reached, and the automotive market is currently experiencing weakness.
Furthermore, the price target for ON shares is set at $48, reflecting a valuation based on future earnings potential, which is higher than its historical median due to anticipated growth in strategic markets like electric vehicles and robotics. However, risks such as excess capacity, pricing pressures on certain products, and a leveraged balance sheet contribute to the cautious Hold rating. These factors collectively suggest a balanced outlook, warranting a Hold rather than a more aggressive Buy or Sell recommendation.
Gerra covers the Technology sector, focusing on stocks such as Himax Technologies, ON Semiconductor, and Intel. According to TipRanks, Gerra has an average return of 5.6% and a 47.20% success rate on recommended stocks.
In another report released on February 27, Rosenblatt Securities also maintained a Hold rating on the stock with a $49.00 price target.