Needham & Company Remains Bullish on ON Semiconductor (ON) Following 2Q
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Needham & Company maintained a Buy rating and $14.00 price target on ON Semiconductor (NASDAQ: ON) following the company's 2Q earnings report. Revenue for the second quarter exceeded the high-end of guidance at $877.8 million, higher than expectations of $855 million. Non-GAAP EPS was reported at $0.23, inline with estimates.
Analyst Rajvindra Gill commented, "ON reported a solid quarter and guide citing strength in industrial and communications, a rebound in computing due to increase content gains from Skylake platform and steady auto growth. With the FCS acquisition likely to close by the end of the month (waiting for China and U.S. approvals), we calculate 20-30% earnings accretion long-term, factoring in our updated ON/FCS pro forma model. With 61% of sales derived from the secular end markets -- auto/industrial—and with several gross margin levers entering 2017, we believe ON is undervalued on a stand-alone basis. Combined with FCS, we believe the stock has significant upside on earnings power of $1.20 to $1.30."
Shares of ON Semiconductor closed at $9.99 yesterday.
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