Chipmaker ON Semiconductor Gets Price-Target Hikes

Cipmaker ON Semiconductor (ON) received several price-target hikes on Tuesday following its upbeat fourth-quarter earnings report on Sunday, and an earnings beat also earned  Tower Semiconductor (TSEM) at least one PT hike.

Shares of Phoenix-based ON Semi rose 2.5% to 15.31 on the stock market today. On Monday, shares rose nearly 6% to 14.94. In intraday trading Monday, they reached a more than 16-year high of 15.86.

ON Semi earned price-target increases from Baird, Mizuho, Needham and Pacific Crest Securities. On Monday, it received a PT hike from Susquehanna Financial Group.

On Sunday, ON Semi said in Q4 it earned 29 cents a share excluding items, up 53% year over year, on sales of $1.26 billion, up 50%. Analysts polled by Thomson Reuters expected 23 cents and $1.22 billion. The company also guided higher for the current quarter.

IBD’S TAKE: ON Semiconductor stock has an IBD Composite Rating of 90, meaning it has outperformed 90% of stocks in key metrics over the past 12 months. But it ranks No. 10 out of 39 stocks in IBD’s Electronics-Semiconductor Manufacturing industry group. To see which companies lead the group, visit the IBD Stock Checkup.

• Needham reiterated its buy rating on ON Semi and upped its price target to 20 from 16.
• Mizuho maintained its buy rating on ON Semi and boosted its PT to 17 from 16.
• Mizuho analyst Vijay Rakesh said 2017 looks like another year of strong growth for ON Semi thanks to tailwinds from its automotive and industrial-chip sales. ON Semi is particularly strong in cameras for advanced driver-assistance systems, he said.
• ON Semi also will benefit from cost synergies from its acquisition of Fairchild and its continued focus on gross margin improvement. 

• Pacific Crest kept its overweight rating on the stock and raised its PT to 18 from 15.
• Baird reiterated its outperform rating and increased its PT to 20 from 14.
• In other chip stock news, Needham raised its price target on Tower Semi to 30 from 25 and maintained its strong buy rating after the company reported Q4 results Monday.
• Tower, aka TowerJazz, fell 1.8% to 22.16 on Tuesday.
• The Israeli chipmaker on Monday said it earned 52 cents a share excluding items, up 93% year over year, on sales of $340 million, up 34%, in the December quarter. Analysts were expecting 48 cents and $340 million.