Cantor Fitzgerald reaffirmed a Neutral rating and a $60.00 price target on ON Semiconductor, citing a combination of encouraging operating signals and persistent headwinds from business exits and concentrated end-market exposure. The firm pointed to mixed quarterly results and guidance that together prompted a cautious stance despite signs of improvement across core markets.
At the time of the note, the stock was trading at $67.05, above Cantor Fitzgerald's target and modestly higher than InvestingPro's calculated Fair Value, while carrying a high price-to-earnings multiple of 88.46.
ON Semiconductor reported combined revenues of $3.015 billion for the quarter, which fell short of the consensus estimate of $3.070 billion. Performance varied across segments: automotive and industrial businesses outperformed expectations, while the company's "Other" segment underperformed. Management attributed that underperformance to exits from non-core operations and softness in consumer demand.
InvestingPro data included with the materials shows a 16.13% decline in revenues over the trailing twelve months, and analysts are forecasting additional sales pressure in the current year. Cantor Fitzgerald emphasized that, despite encouraging signs of recovery, growth challenges persist.
Management commentary included indications of an improving cycle across automotive, industrial and AI infrastructure markets, according to Cantor Fitzgerald. The company reported improving order trajectories, healthier inventory balances in core markets and lengthening lead times, which the research firm views as signals of gradual demand normalization.
Gross margin performance modestly exceeded expectations as the company's "fab-right" initiatives continue to advance. Cantor Fitzgerald cited an anticipated expansion of gross margins through 2026 driven by higher utilization, favorable mix shifts and ongoing benefits from fab-right actions, projecting the company will exit the year at a 40.5% gross margin.
Despite those margin tailwinds and improving demand indicators, Cantor Fitzgerald maintained its Neutral recommendation. The firm pointed to continued growth pressure in 2026 as ON completes business exits totaling roughly $300 million throughout the year, and to the company's relatively large exposure to the automotive market as a constraint on upside. Cantor Fitzgerald models earnings per share of $4.00 into 2027 and supports the $60 price target on a multiple of 15 times 2027 EPS.
Other brokerages reacted to ON Semiconductor's quarter with more constructive target revisions. Truist Securities described fourth-quarter results as broadly in line with expectations, with modest revenue shortfalls, and raised its price target from $57 to $66 while retaining a Hold rating. Piper Sandler lifted its target to $75, pointing to solid operating performance even as the company exited non-core operations that accounted for about $40 million in the December 2025 quarter.
KeyBanc Capital Markets also increased its target to $75 and maintained an Overweight rating, citing signs of a cyclical recovery in semiconductors. Needham raised its target to $72, citing margin expansion and an earnings beat, and noted that next-quarter EPS guidance topped its estimates, while highlighting the role of the company's fab-right program in driving gross margin improvement. Jefferies moved its target to $73, calling out robust growth in AI data center demand, which it said now represents about 7% of ON Semiconductor's revenue and helps offset the impacts of non-core exits and industrial volatility.
Overall, the quarter produced a mixed picture: improving underlying trends in important end markets and early margin benefits from strategic actions contrasted with revenue misses, continued non-core business exits and concentrated exposure to cyclical automotive demand. These dynamics prompted a divergence in analyst reactions that ranged from maintained neutrality to more bullish target increases among several firms.