ON Semiconductor (ON) PT Raised to $20 at Needham & Company Following 4Q
Needham & Company raised its price target on ON Semiconductor (NASDAQ: ON) to $20.00 (from $16.00) while maintaining a Buy rating. ON beat estimates across the board with $1.261 billion in revenue in 4Q, up 33% Q/Q, compared to a consensus estimate of $1.216B. Non-GAAP EPS was $0.29 vs previous estimates of $0.23.
Analyst Rajvindra Gill commented, "ON posted a significant beat and raise quarter with stronger than expected demand for both its organic business and the Fairchild business. ON is progressing well on GMs improvement as higher growth areas (Industrial, Automotive, Smartphones) have higher than corporate average GMs. With an improved pricing environment and faster than expected synergies from the FCS acquisition, we believe ON deserves a higher multiple and are increasing our PT to $20 – based 14.8x P/E on our new 2018E. Importantly, in our bottom up analysis, due to ADAS, we estimate the sensor market will nearly triple– with camera based systems remaining the predominate system. Future high level autonomous cars will require 6-10 cameras with ASPs of $8 per camera. The company also has $32 worth of front headlight LED lighting in cars."