With a market cap of $16.2 billion, ON Semiconductor Corporation (ON) is a key player in intelligent sensing and power semiconductor solutions. The company operates in three segments: Power Solutions, Analog and Mixed-Signal, and Intelligent Sensing. It provides various products, including SiC components, CMOS image sensors, power management ICs, and custom ASICs for automotive, industrial, and mobile applications.

Over the past 52 weeks, shares of the Scottsdale, Arizona-based company have underperformed the broader market significantly. ON has dipped 45.4%, while the S&P 500 Index ($SPX) has gained 10.2%. Year-to-date, ON shares are down 39.1%, in contrast to the S&P 500’s decrease of 3.9%.

Focusing specifically on semiconductor components, ON has also lagged behind the SPDR S&P Semiconductor ETF’s (XSD) 10.7% decline during the same period.

Despite beating Q1 2025 expectations with adjusted EPS of $0.55 and revenue of $1.45 billion, ON Semiconductor shares fell 8.4% on May 5 due to a 22% year-over-year revenue decline. Although the Q2 revenue forecast stood at $1.4 billion – $1.5 billion, above consensus estimates at the midpoint, investor optimism was dampened by concerns regarding sustained margin pressures and the potential economic impact from new U.S. auto tariffs. The company’s decision to withdraw a $6.9 billion bid for Allegro MicroSystems and announce 2,400 global layoffs has further fueled investor unease.

For the current fiscal year ending in December 2025, analysts predict a 38.2% year-over-year decline in ON’s adjusted EPS, bringing it down to $2.46. The company has shown a mixed earnings surprise history, beating consensus estimates in three of the last four quarters while falling short on one occasion.

Among the 30 analysts covering the stock, the consensus rating stands at “Moderate Buy.” This rating comprises 14 “Strong Buy” ratings, one “Moderate Buy,” 13 “Holds,” one “Moderate Sell,” and one “Strong Sell.”

This assessment reflects a more cautious outlook compared to three months ago, when there were 16 “Strong Buy” ratings.

On May 6, BofA Securities lowered ON’s price target to $46 based on anticipated margin pressure and increased operating expenses. However, the firm maintained a “Buy” rating, citing strong free cash flow and rising demand in industrial and electric vehicle sectors. FY2025 and FY2026 EPS estimates were also adjusted to $2.27 and $2.75, respectively.

As of now, ON is trading below the mean price target of $54.44. The highest price target from analysts stands at $91.40, suggesting a potential upside of nearly 138% from current levels.

On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.

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