ON Semiconductor Stock (NASDAQ: ON) Continues Decline as Analyst Cuts Price Target

Bank of America (BofA) has reduced its price target for ON Semiconductor Corporation (NASDAQ: ON), from $90 to $75, maintaining a ‘Buy' rating on the stock. The adjustment comes after analysts attended the CES trade show, engaging with various technology sectors, where ON Semiconductor's outlook was notably less optimistic than previously. Concerns about recovery prospects in both the near-term and the calendar year 2025 have led to a subsequent decrease in the estimated pro-forma EPS for the next few years.

Following the announcement, ON Semiconductor's shares fell by 7.79%, with the stock price landing at $53.76 from the previous close of $58.31. The sharp decline in price highlights market concerns following BofA's revised outlook and reduction in EPS estimates for the coming years, and the broader decline that has hit U.S markets on hot job numbers.

The stock had already been on a downward trend before the cut, with the year-to-date decline now approaching 16%.

On Semiconductor Corporation, headquartered in Scottsdale, Arizona, is a pivotal player in the semiconductors sector within the technology industry. They provide intelligent sensing and power solutions on a global scale. The corporation's divisions include the Power Solutions Group, Advanced Solutions Group, and Intelligent Sensing Group, tackling essential aspects such as power switching, conversion, signal conditioning, and circuit protection.

Financials and Market Performance

The company, with a current market cap of $24.83 billion, has a trailing P/E ratio of 14.47, with the forward P/E at 13.72. Today's downturn in stock price see's the stock also hit a new 52-week low at $53.71.

Institutional holdings indicate strong support, with institutions holding over 104% of the stock, reflecting notable confidence from major investors. With total revenue reported at $7.38 billion and net income to common of $1.76 billion, the company has robust financial metrics. However, these have not been enough to shield the stock from today's adverse reaction to the revised analyst outlook.

On Semiconductor is given an average target mean price of $84.49 and a consensus ‘buy' recommendation based on 29 analyst opinions, despite today's price target downgrade. The industry at large is grappling with recovery timelines and demand fluctuations, directly impacting companies like On Semiconductor.

While downward revisions to EPS and price targets reflect immediate concerns, On Semiconductor's positioning within the semiconductors space still draws investor interest, given global reliance on advanced electronic components and systems across multiple industries.