UPDATE: MKM Partners Upgrades ON Semi (ONNN) to Buy

MKM Partners upgraded ON Semi (NASDAQ: ONNN) from Neutral to Buy with a price target of $13.00.

Analyst Ian Ing said, "We see multiple sources of valuation support (attractive P/E, FCF) as fundamentals improve with ongoing strength in its largest end-markets (Industrial + Auto 47% sales), further enhanced by a design win pipeline (led by automotive, smartphones, and select industrial). With fundamentals uplift, ONNN's manufacturing-heavy model and restructured SSG segment are poised to deliver higher utilization rates and gross margin leverage (50-60% incremental gross margins)."

"Despite the recent run on the Sanyo restructuring and modest fundamentals improvement, ONNN shares remain inexpensive and attractive here in terms of both P/E (~10x consensus FY15) and free cash flow yield (9-10%). We believe its relative value bodes well for ONNN as investors take profits in momentum-growth names and rotate into more value-oriented names," he added.

For an analyst ratings summary and ratings history on ON Semi click here. For more ratings news on ON Semi click here.

Shares of ON Semi closed at $9.58 yesterday.

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