ON Semiconductor (ON) PT Lowered to $75 at Evercore ISI

Evercore ISI analyst Mark Lipacis lowered the price target on ON Semiconductor (NASDAQ: ON) to $75.00 (from $107.00) while maintaining a Outperform rating.

The analyst comments "Stock Discounting Cuts. ON’s Mar25Q rev outlook is 17% below consensus, 36% below 3Q23 peak, and assumes 25% YY decline. ON trades at a 26% discount to its 20yr relative P/E (to S&P) median, which is consistent with our analysis that shows adjusting for ASP increases, the aggregate amount of undershipment (area under the curve) during the inventory correction is 28% below the aggregate amount of overshipment (area above the curve) during the inventory build. We think that the area below/above the curve analysis does not contemplate share gains as EVs increased penetration, and therefore view the risk-reward ratio of ON as positive at current levels. We are buyers of the stock, as we believe 1) the Mar-25Q will mark the bottom for ON revenues and YY growth, 2) the auto-supply chain is taking inventories below normal levels, and 3) we expect ON will benefit from a restocking cycle and post accelerating growth in 2H25."

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