The analyst price target for ON Semiconductor has moved from US$70.00 to about US$76.53. Analysts point to updated assumptions for revenue growth, profit margins, discount rates and future P/E to support the new view.
What's in the News
- ON Semiconductor has been removed from the NASDAQ-100 Index, which can affect index fund ownership and trading activity in the shares (Index Constituent Drops).
- The company announced an extension of its engagement with FORVIA HELLA, with adoption of onsemi PowerTrench T10 MOSFET technology across advanced automotive platforms, supported by manufacturing at the East Fishkill, NY facility (Client Announcements).
- InnoScience (Suzhou) Technology Holding and onsemi agreed to cooperate on 8 inch GaN on silicon processes to support applications such as new energy vehicles, artificial intelligence, data centers, and industrial uses. The cooperation is expected to generate hundreds of millions of US dollars in GaN sales over time (Strategic Alliances).
- The Board of Directors authorized a new share repurchase program of up to US$6.0 billion, with authorization through December 31, 2028, following a prior authorization on November 18, 2025 (Buyback Transaction Announcements).
- For the fourth quarter of 2025, onsemi issued earnings guidance with expected revenue of US$1,480 million to US$1,580 million and diluted EPS of US$0.56 to US$0.66. The company also reported that it repurchased 6,133,386 shares for US$325.07 million from July 5, 2025 to October 3, 2025 under its ongoing buyback program (Corporate Guidance, Buyback Tranche Update).
Valuation Changes
- Fair Value: Updated estimate moves from US$70.00 to about US$76.53, indicating a moderately higher assessment of the shares.
- Discount Rate: Revised from 10.73% to about 11.14%, reflecting a slightly higher required return in the model.
- Revenue Growth: Assumption adjusted from 7.22% to about 9.91%, indicating that a higher growth rate is now built into the valuation.
- Net Profit Margin: Assumption moves from 32.93% to about 23.71%, indicating a lower profitability level in future years within the model.
- Future P/E: Valuation multiple updated from 13.25x to about 18.88x, indicating that a higher price relative to expected earnings is now applied.
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