Price target move and context
Piper Sandler raised its price target for ON Semiconductor (NASDAQ:ON) to $75.00 from $65.00 and maintained an Overweight rating on the stock. The new target implies upside relative to the most recent share price of $65.10. The shares have shown notable momentum recently, climbing more than 36% over the past six months and trading close to a 52-week high of $66.86.
Valuation note
The firm commentary referenced the company’s positioning versus a proprietary Fair Value model, which suggests the stock appears fairly valued under that framework.
Impact of non-core exits on reported results
Piper Sandler's research highlighted that ON Semiconductor posted solid quarterly results, but performance was partially masked by divestitures of non-core product lines. The firm quantified these exits at roughly $40 million in the December 2025 quarter and anticipates a further $50 million of exits in the March 2026 quarter. These reductions in scope are consistent with a reported revenue decline of 16.13% over the last twelve months and with analyst projections calling for an approximate 15% sales decline for the current fiscal year.
Core business traction
Despite the revenue drag from those product exits, Piper Sandler emphasized that ON Semiconductor’s underlying operations are gaining traction. The research note singled out growth in the industrial segment and in AI data center initiatives as authentic contributors to the company’s forward momentum. Additionally, the firm reported that automotive inventory levels have normalized. In the current quarter the industrial business is reportedly expanding, aided by strength in factory automation as well as aerospace and defense applications.
Balance sheet and operating efficiency
The company’s balance-sheet indicators remain supportive. Data from a pro research service show a current ratio of 5.23 and a debt-to-equity ratio of 0.46, reflecting a healthy liquidity position with moderate leverage. That same research service notes it contains 14 additional investment insights on the company in its subscription Pro Research Report.
Under-utilization charges and revenue threshold
Piper Sandler also flagged approximately 700 basis points of under-utilization charges currently carried by the company. According to the firm, those charges would be eliminated if quarterly revenues reach about $1.9 billion after factoring in divestitures and related adjustments.
Analysts cite segment dynamics in raising targets
The firm’s view that growth in industrial automation and AI data center end markets justifies a higher target is consistent with other recent analyst activity. ON Semiconductor reported fourth-quarter fiscal 2025 results that included a modest earnings beat; EPS came in at $0.64 versus a consensus forecast of $0.62, while revenue was $1.53 billion, in line with expectations.
Following that reporting, several firms adjusted their models and price targets. KeyBanc Capital Markets raised its target to $75 and maintained an Overweight stance while noting that product exits offset signs of a cyclical recovery in the semiconductor market. Needham lifted its target to $72, pointing to the EPS beat and anticipating gross margin expansion tied to the company’s "Fab right" strategy. Jefferies increased its target to $73, calling out robust growth in AI data centers, which comprise roughly 7% of ON Semiconductor’s revenue; that growth is helping to offset headwinds from non-core product exits and variability in the industrial portfolio.
Market reaction
Even with the cluster of target increases and the earnings beat, the stock experienced a small decline in after-hours trading, a move the firms described as reflecting investor caution amid the transitions and mixed top-line trends.
Conclusion
Piper Sandler’s decision to raise its price objective while keeping an Overweight rating is grounded in the firm’s view that core industrial end markets and AI data center exposure are driving sustainable growth, despite near-term revenue headwinds from planned divestitures and under-utilization charges.
Note: This article reports analyst commentary, company results and research-service metrics as disclosed in the available analyst notes and quarterly filings.