Tuesday: ON Semiconductor stock (NASDAQ:ON) has retained its Buy rating and a $92.00 price target from Mizuho, following a series of meetings in New York with the company's top executives. The discussions with CEO Hassane El-Khoury, CFO Thad Trent, and VP of Investor Relations Parag Agarwal provided insights into the company's outlook and challenges for 2024.
The semiconductor firm is navigating uneven demand in the automotive sector, which poses a challenge to its 2024 forecast. Despite potential lighter electric vehicle (EV) volumes and inventory management by customers in a slowing market, ON Semiconductor aims to grow twice as fast as the silicon carbide (SiC) market.
The company has also made progress in diversifying its supply chain by qualifying certain SiC substrate suppliers in China. This move could be a step towards establishing a reliable SiC substrate supply chain within the country.
Moreover, ON Semiconductor expects stable pricing and improving gross margins by the end of 2024, bolstered by tailwinds from the Electrical Filament Fabrication (EFK) process and increased utilization. Mizuho's stance on the stock remains unchanged, with the belief that ON Semiconductor continues to perform well and increase its market share, even as it faces some hurdles in the EV and Chinese markets.
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