What Happened?
Shares of analog chips maker ON Semiconductor (NASDAQ:ON) fell 7.8% in the morning session after Truist analyst downgraded the stock's rating from Buy to Hold and lowered the price target from $85 to $60, citing weaker demand trends. Following a meeting with ON, the analysts added, "Management indicated that the business it intended to exit over the last couple of years will come to fruition this year, further pressuring revenue and, in turn, margins.".
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What The Market Is Telling Us
ON Semiconductor’s shares are very volatile and have had 21 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock gained 13.1% on the news that the company reported second quarter earnings results that exceeded analysts' revenue, operating income, and EPS expectations. On the other hand, its revenue guidance for next quarter missed analysts' expectations and its inventory levels increased. Overall, this was a mixed quarter for ON Semiconductor, but the market seemed to show some relief and focus on the positives.
ON Semiconductor is down 10.6% since the beginning of the year, and at $55.17 per share, it is trading 33.5% below its 52-week high of $82.96 from March 2024. Investors who bought $1,000 worth of ON Semiconductor’s shares 5 years ago would now be looking at an investment worth $2,243.
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