ON Semiconductor Corporation (NASDAQ:ON) is one of the 14 AI Stocks Making Moves on Wall Street: Nvidia, Micron, and More.
Recently, ON Semiconductor was in the news related to announced plans for buying Synaptics, an American neural network technologies and computer-to-human interface devices development company, for an estimated $7 billion, its largest acquisition ever
However, one Wall Street firm isn’t enthusiastic about it. On June 26, TD Cowen analyst Joshua Buchalter downgraded the stock from Buy to Hold with a price target of $110.00. The firm is negative on the said acquisition, believing that it is going to add complexity and distract it from the core auto/DC growth story.
We downgrade ON to Hold following its announced plans to acquire Synaptics. We believe in the organic auto/DC growth and cap return story but think the deal adds complexity to an already complicated model reliant on loadings to drive EPS. +>100% YTD and at ~25x our 2027E, we think shares are fairly valued. We look forward to the Sept AD for more details on onsemi’s long-term vision.