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ON: Future GaN And Buyback Tailwinds Will Likely Disappoint Expectations

Geopolitical And Tariff Risks Will Compress Margins Despite EV Trends

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ON
AnalystLowTarget
Not Invested
Published 14 Apr 2025
33 viewsusers have viewed this narrative update

Update shared on 27 Dec 2025

Fair value Increased 1.98%
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1Y
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7D
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Narrative Update on Analyst Price Target for ON Semiconductor

Analysts have modestly raised their price target for ON Semiconductor by approximately $0.86, reflecting slightly higher expectations for fair value, revenue growth, profit margins, and future earnings multiples.

What's in the News

  • ON Semiconductor was removed from the NASDAQ 100 Index, potentially affecting index fund ownership and trading dynamics (Index Constituent Drops).
  • The company announced a new share repurchase authorization of up to $6 billion through December 31, 2028, following Board approval of a fresh buyback plan in November 2025 (Buyback Transaction Announcements).
  • ON Semiconductor reported updated fourth quarter 2025 guidance, projecting revenue of $1,480 to $1,580 million and diluted earnings per share of $0.56 to $0.66 (Corporate Guidance).
  • onsemi entered a strategic cooperation with InnoScience to accelerate adoption of 8 inch GaN on silicon technology in electric vehicles, AI, data centers, and industrial applications, with the partnership targeting hundreds of millions of dollars in future GaN sales (Strategic Alliances).
  • onsemi extended its long term collaboration with FORVIA HELLA, which will adopt PowerTrench T10 MOSFET technology across advanced automotive platforms. The company also advanced its Treo platform ecosystem through new agreements with Teledyne Technologies and Weebit Nano for next generation imaging and memory solutions (Client and Product Announcements).

Valuation Changes

  • The Fair Value estimate has risen slightly from $43.22 to $44.08 per share, implying a modest upward revision in intrinsic value.
  • The Discount Rate has increased slightly from 11.10 percent to 11.22 percent, indicating a marginally higher required return for the equity.
  • The Revenue Growth assumption has risen slightly from 4.35 percent to 4.44 percent, reflecting a small improvement in expected top line expansion.
  • The Net Profit Margin forecast has edged higher from 27.18 percent to 27.52 percent, pointing to a modestly stronger long term profitability outlook.
  • The future P/E multiple has increased slightly from 10.86x to 10.94x, suggesting a small uplift in the valuation framework applied to forward earnings.

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Disclaimer

AnalystLowTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystLowTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystLowTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.