Truist Downgrades ON Semiconductor to “Hold” Due to Deteriorating Demand Trends and Ongoing Business Restructuring
Truist has downgraded its rating of ON Semiconductor Corporation (NASDAQ:) to “hold” from “buy” due to deteriorating demand trends and ongoing business restructuring. The brokerage set a new price target of $60, implying a 4x discount to peers at 20x 2026 EPS.
The analyst noted that despite the recent sell-off in the shares, a more cautious stance on the stock is warranted until estimates are re-established. The management has confirmed plans to exit certain businesses this year, which will put pressure on both revenue and margins.
As a result, Truist lowered its earnings estimates, cutting CY25 EPS to $3.18 from $4.36 and CY26 EPS to $3.76 from $5.33. The analyst described demand for diversified end market semiconductors as “mixed to weak,” with ON Semiconductor sounding particularly weak.