Robert W. Baird analyst Tristan Gerra has maintained their neutral stance on ON stock, giving a Hold rating today.
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Tristan Gerra has given his Hold rating due to a combination of factors affecting ON Semiconductor. The company is facing historically low utilization rates, currently in the mid-50s range, as it focuses on managing inventory levels. This marks a significant decline from previous levels and indicates the company’s strategy to position itself for future recovery, potentially impacting short-term growth and market share.
Moreover, ON Semiconductor is undertaking several cost-saving measures, such as rationalizing its manufacturing footprint and product portfolio, reducing headcount, and considering potential site closures. These strategies aim to improve gross margins in the long term. However, the near-term financial outlook appears challenging, as evidenced by lower-than-expected earnings and revenue guidance for the upcoming quarter. These factors combined lead to a cautious outlook, warranting the Hold rating.
Based on the recent corporate insider activity of 53 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.