What to Expect From ON Semiconductor's Q3 2024 Earnings Report

Barchart · 10/18 09:48

Valued at a market cap of $29.8 billion, ON Semiconductor Corporation (ON) is an equipment manufacturer of a broad range of discrete & embedded semiconductor components that provides intelligent sensing and power solutions. The Scottsdale, Arizona-based company is expected to announce its fiscal Q3 earnings results before the market opens on Monday, Oct. 28.

Ahead of this event, analysts project the semiconductor company to report a profit of $0.97 per share, down 30.2% from $1.39 per share in the year-ago quarter. The company has consistently beaten Wall Street's earnings estimates in the last four quarters. Its adjusted earnings of $0.96 per share for the last quarter outpaced the consensus estimates by almost 4.4%.

For fiscal 2024, analysts expect ON to report an EPS of $4.01, down 22.3% from $5.16 in fiscal 2023. Nonetheless, EPS is expected to grow 18.5% year-over-year to $4.75 in fiscal 2025.

Shares of ON have declined 17.1% on a YTD basis, significantly underperforming both the S&P 500 Index's ($SPX) 22.5% surge and the Technology Select Sector SPDR Fund’s (XLK) 19.5% return over the same period.

ON has underperformed due to relatively high interest rates prevalent in the economy, which adversely affected both its key industrial and automotive end markets. However, on Jul. 29, shares of ON jumped 11.5% after its better-than-expected Q2 earnings release. Its revenue declined 17.2% year-over-year to $1.74 billion, but the company’s positive Q3 guidance and investor optimism surrounding its major multiyear supply agreement with Volkswagen might have further contributed to its upward price movement.

More recently, on Oct. 15, Bloomberg reported that the Biden administration is discussing capping sales of advanced AI chips on a country-specific basis. The news was not taken well by the investors, leading to a significant fall in the share price of various chip stocks, including a 4.8% decline in ON stock.

Analysts' consensus view on ON Semiconductor’s stock is moderately optimistic, with a "Moderate Buy" rating overall. Among 29 analysts covering the stock, 15 recommend “Strong Buy," one suggests "Moderate Buy," 11 indicate “Hold,” one recommends “Moderate Sell,” and one suggests a “Strong Sell” rating. This configuration is slightly less bullish than three months ago, with 16 analysts suggesting a "Strong Buy."

The average analyst price target for ON is $86.97, indicating a 25.6% potential upside from the current levels.

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On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.