Collins Stewart Cuts Price Targets on Didodes (DIOD) & ON Semiconductor (ONNN) Following Market Checks
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Price: $90.74 -3.8%
Rating Summary:
9 Buy, 7 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
Rating Summary:
9 Buy, 7 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
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Due to excess channel inventory and weakening demand, Collins Stewart has cut its estimates and price targets on Didodes Inc. (Nasdaq: DIOD) and ON Semiconductor Corp. (Nasdaq: ONNN).
Based on the shares current valuation levels the firm is reiterating its Buy rating on both shares of DIOD and ONNN, but anticipates a delay in the recovery of gross margin and revenue growth in 2012 due to higher inventories and increased pricing.
Following recent market checks, Collin Stewart believes that many investors are forecasting that a reduced outlook for the fourth quarter.
An analyst at Collins Stewart comments, "While we believe that downward revisions to Q4’11 estimates are widely anticipated, we expect a greater negative impact to DIOD’s Q4’11 outlook given its Sell-in revenue recognition policy vs. ONNN, who recognizes revenues on a Sell-through basis."
The firm is lowering its price target on shares of DIOD from $25 to $22 and its EPS estimates for FY11 and FY12 from $1.55 and $1.41 to $1.50 and $1.20. Collins revenue estimates for the two years were cut to $649.7 million and $631.8 million.
Collins Stewart is reducing its price target on shares of ONNN from $12 to $10 and its EPS estimates for FY11 and FY12 from $1.02 and $1.19 to $0.98 and $0.98. The firm's revenue estimates for the two years were cut to $3.56 billion and $3.58 billion.
Based on the shares current valuation levels the firm is reiterating its Buy rating on both shares of DIOD and ONNN, but anticipates a delay in the recovery of gross margin and revenue growth in 2012 due to higher inventories and increased pricing.
Following recent market checks, Collin Stewart believes that many investors are forecasting that a reduced outlook for the fourth quarter.
An analyst at Collins Stewart comments, "While we believe that downward revisions to Q4’11 estimates are widely anticipated, we expect a greater negative impact to DIOD’s Q4’11 outlook given its Sell-in revenue recognition policy vs. ONNN, who recognizes revenues on a Sell-through basis."
The firm is lowering its price target on shares of DIOD from $25 to $22 and its EPS estimates for FY11 and FY12 from $1.55 and $1.41 to $1.50 and $1.20. Collins revenue estimates for the two years were cut to $649.7 million and $631.8 million.
Collins Stewart is reducing its price target on shares of ONNN from $12 to $10 and its EPS estimates for FY11 and FY12 from $1.02 and $1.19 to $0.98 and $0.98. The firm's revenue estimates for the two years were cut to $3.56 billion and $3.58 billion.
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