© Reuters ON Semiconductor (ON) Facility Tour Provides Conviction in Forward Growth Outlook
By Sam Boughedda
ON Semiconductor (NASDAQ:) shares rallied 7.8% Friday after comments from analysts following a tour of the company’s SiC Boules Growth Facility.
Analysts at Wells Fargo and Goldman Sachs both provided commentary after they toured ON’s silicon carbide boules growth facility, a facility gained from the company’s November acquisition of GT Advanced.
A Wells Fargo analyst has an Overweight rating and a $75 price target on the stock. He stated that the key highlights from the tour and discussions with management include the event solidifying how ON is transitioning a small GTAT asset into a massive SiC growth and furnace operation and ON being in the process of 4x output at the New Hampshire SiC materials operation (at 3.0x output today; expect to be at 5.0x output by the end of FY22).
A Goldman Sachs analyst wrote: “While there were no major financial updates, we came away from the event with a better appreciation of onsemi’s competitive differentiation as well as management’s conviction in the forward growth outlook supported by long-term supply agreements. We reiterate our Buy rating on ON and see the ongoing transformation (i.e. portfolio optimization + fab lighter strategy) combined with secular growth in SiC and Sensing driving solid through-cycle revenue growth and margin expansion.”
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