Needham Raises ON Semiconductor Price Target to $110

Needham analyst Rajvindra Gill raised the price target on ON Semiconductor (NASDAQ: ON) to $110.00 (from $72.00) while maintaining a Buy rating.

“Onsemi posted a beat and raise driven by strength across the business. Our key takeaways include: 1) Near-term demand dynamics are turning positive and margin expansion is following.

Management cited an increase in expedited orders and visibility as they believe the cycle is on the path to recovery. Margins are being aided by increased capacity utilization.

2) ON’s data center revenue is now expected to double Y/Y to $500MM and further tailwinds are expected to come from data center adjacent products within energy infrastructure.

3) The Automotive segment is benefiting from content growth specifically around Treo, IGBTs and SiC.

4) The company’s GaN design funnel now exceeds $1.5bn, across 30 products supporting 40V to 1,200V applications.

We raise our 12-month PT to $110, based on 20x our new CY28 NG EPS estimate of $5.50.”

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