BofA Upgrades On Semiconductor to Buy Amid Market Challenges
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 13 2026
0mins
Source: seekingalpha
- Upgrade Announcement: BofA upgraded On Semiconductor's rating from Neutral to Buy and raised the price target from $70 to $85, resulting in a premarket share increase of about 3%, despite a sluggish auto and EV market environment.
- Financial Performance: Analysts highlighted ON Semiconductor's free cash flow yield of approximately 6% and a commitment to a $6 billion stock buyback over the next three years, significantly enhancing the company's capital return capabilities.
- Market Potential: Although the stock has declined 36% over the past three years due to auto and EV-related weaknesses, the company has demonstrated strong recovery potential by cutting costs and focusing on free cash flow generation, with an upcoming analyst day likely to emphasize its AI capabilities.
- Downgrade Announcement: BofA downgraded NXP Semiconductors from Buy to Neutral, lowering the price target from $245 to $230; despite strong performance in ADAS and radar, the lack of AI products and limited EV exposure may constrain future profitability.
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Analyst Views on ON
Wall Street analysts forecast ON stock price to fall
19 Analyst Rating
9 Buy
10 Hold
0 Sell
Moderate Buy
Current: 83.010
Low
50.00
Averages
61.25
High
80.00
Current: 83.010
Low
50.00
Averages
61.25
High
80.00
About ON
ON Semiconductor Corporation is engaged in providing intelligent power and intelligent sensing solutions. The Company’s intelligent power technologies enable the electrification of drivetrain in the automotive industry to allow for lighter and longer-range electric vehicles. Its segments include Power Solutions Group (PSG), the Analog and Mixed-Signal Group (AMG) and the Intelligent Sensing Group (ISG). PSG segment provides a portfolio of discrete, module, and integrated semiconductor devices designed to enable conversion across artificial intelligence (AI) data centers, energy infrastructure, automotive and industrial. AMG segment designs and develops a range of analog and mixed-signal solutions including power‑management, sensor‑interface, connectivity, and products that serve automotive, industrial automation, AI data center, computing, and mobile end markets.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Positive Market Reaction: Following this news, semiconductor manufacturer Teradyne (NASDAQ:TER) and analog semiconductor company onsemi (NASDAQ:ON) both jumped 3%, indicating strong buy-side interest in the semiconductor sector, particularly in the logic and memory markets.
- Improved Capital Expenditure Outlook: The cooling of energy-driven inflation provides a more favorable backdrop for the massive capital expenditures required to build new fabrication plants, and as the geopolitical discount evaporates, the attractiveness of investments in chipmakers significantly increases.
- Investment Return Potential: Teradyne has surged 81.9% since the beginning of the year, with a current share price of $377.54, setting a new 52-week high, and an investment of $1,000 five years ago would now be worth $2,989, showcasing its strong investment potential.
See More
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- AMD Hits All-Time High: AMD's stock has risen 13% this week, climbing over 40% during a 12-day streak, marking an all-time high and reflecting strong market confidence in its product demand, indicating a significant recovery in the semiconductor industry.
- Microsoft's Strong Rebound: Microsoft is up more than 14% this week, poised for its best week since April 2015, following its worst quarter since 2008, demonstrating optimistic market expectations for its future growth.
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- Earnings Expectations Raised: The company is expected to report quarterly earnings of $0.62 per share, representing a year-over-year increase of 12.7%, while revenues are projected at $1.49 billion, up 2.9% from the previous year, indicating solid performance in the semiconductor market.
- Positive Earnings Revision Trend: Over the past 30 days, ON Semiconductor's consensus EPS estimate has been revised 1.4% higher, and such positive earnings estimate revisions are typically correlated with stock price appreciation, making it essential for investors to monitor its future performance.
- Enhanced Industry Position: As a member of the Zacks Semiconductor - Analog and Mixed industry, ON Semiconductor ranks second, showcasing its competitive edge in a rapidly growing market, particularly in the areas of silicon carbide and gallium nitride innovations.
See More
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