ON Semiconductor (ON) PT Raised to $51 as Jefferies Margin Expansion Thesis Plays Out
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Jefferies analyst Mark Lipacis raised the price target on ON Semiconductor (NASDAQ: ON) to $51.00 (from $45.00) after 2Q results show the gross margin expansion thesis playing out.
The analyst reiterated a Buy rating, stating "2Q Revs/non-GAAP GM 3%/150bps above consensus resulting in EPS 30% above. 3Q21 Rev/GM outlook are 6%/270bps above consensus, EPS 44% above. 4Q21 expected flat QQ. GM upside is due to a faster than expected mix shift and cost-cutting measures. Consistent with other semis, ON continues draining the channel to control product allocation in a tight market. Our bull-case 2023 EPS estimate of $3.50 assumes 48% GM. Reiterate Buy."
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