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ON Semiconductor Reports Solid Quarter; Analysts Share Mixed Views

Alex Cho

ON Semiconductor's (NASDAQ: ONNN) reported solid earnings Thursday, resulting in analysts having more upbeat commentary on the company.

FBR & Co - Reiterates Outperform and $12 Price Target:

“After the close on Thursday, July 31, ON Semiconductor reported slightly better-than expected 2Q14 revenue and EPS, offset by slightly weaker-than-expected 3Q14 top-line guidance. A hang-up for investors last quarter, Sanyo rebounded nicely with revenue up +14% sequentially, as the company expects profitability next quarter. Given the nearly –10% fall in share price since earnings season began vs. S&P 500 down 2%, we think investors should consider these results and guidance “better than feared."

Morgan Stanley - Reiterates Underweight and $8.50 Price Target:

“Street revenue estimates for 2H'14 are too high and probably have to come down by around 3%. ON is the only analog company in our coverage to guide below the Street for Q3, outside of Maxim (Samsung weakness). We continue to prefer peer FCS (Overweight), owing to much stronger operating leverage and cleaner cash return story.”

Evercore - Reiterates Underweight and $8 Price Target:

“Our $8 PT is based on 8x our 2015 EPS of 95c. We believe a 8x multiple, below the 5-yr average of 11x, is appropriate given our belief that we are in the mid- to late-innings of the current cycle and shares have historically traded in a range of 14x (cycle peak) to 5x (cycle trough). We also see signs of further integration risk with Aptina, and the recent acquisitions have delayed net debt neutral.”

The stock traded recently at $8.80, up 2.75 percent.

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