Citi has expressed increased optimism towards the semiconductor industry following stronger-than-expected sales data for August. Analog Devices (ADI, Financial) remains Citi's top pick in the sector. Additionally, the investment bank has given "buy" ratings to AMD (AMD), Broadcom (AVGO), Micron Technology (MU), Microchip Technology (MCHP), and Texas Instruments (TXN).Citi analyst Christopher Danely noted in an investor report that the 2024 semiconductor sales forecast has been revised upward from a 14% year ...

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Group 1: Pentair - Pentair's growth prospects are bolstered by the potential improvement in its pool products business due to lower interest rates, with an expected increase in new pool construction from 60,000 to a more natural range of 75,000 to 80,000 pools in the coming years [2] - Approximately 50% of Pentair's pool segment sales come from the aftermarket, indicating that recovering new pool construction and servicing of existing pools will lead to mid-single-digit sales growth and margin expansion [2][4] - The company aims to improve its return on sales from 20.8% in 2023 to 24% by 2026 through transformational initiatives, including targeted pricing and lean management techniques [3] Group 2: United Airlines - The airline industry is characterized by its cyclical nature and challenges in generating profits, with the IATA estimating a return on invested capital of 5.7% in 2024 against a WACC of about 9.1% [5] - North America is expected to contribute $14.8 billion of the $30.5 billion in industry net profit in 2024, with United Airlines projected to generate $3.1 billion in net profit [6] - United Airlines is currently trading at 5.7 times estimated 2024 earnings, indicating it may be undervalued if the industry maintains rational capacity management [6] Group 3: ON Semiconductor - ON Semiconductor's focus on industrial and automotive markets has faced challenges due to high interest rates affecting auto sales and investment in electric vehicles [7][8] - The company's growth potential relies on increasing content sales per vehicle for electric vehicles and investments in EV charging networks and renewable energy [8] - ON Semiconductor plans to invest up to $2 billion in an advanced power semiconductor manufacturing plant in central Europe, positioning itself for future growth as interest rates decline [9]

The most recent trading session ended with ON Semiconductor Corp. (ON) standing at $71.51, reflecting a +0.65% shift from the previouse trading day's closing. The stock's change was more than the S&P 500's daily gain of 0.01%. On the other hand, the Dow registered a gain of 0.09%, and the technology-centric Nasdaq increased by 0.08%.The semiconductor components maker's stock has climbed by 0.41% in the past month, falling short of the Computer and Technology sector's gain of 1.03% and the S&P 500's gain of ...

The most recent trading session ended with ON Semiconductor Corp. (ON) standing at $69.74, reflecting a +0.24% shift from the previouse trading day's closing. This move lagged the S&P 500's daily gain of 0.28%. Elsewhere, the Dow gained 0.15%, while the tech-heavy Nasdaq added 0.15%.Heading into today, shares of the semiconductor components maker had lost 8.89% over the past month, lagging the Computer and Technology sector's loss of 0.02% and the S&P 500's gain of 2% in that time.The investment community w ...

Core Viewpoint - Onsemi has faced a challenging 2024 with a 12% decline in share price, underperforming compared to the Invesco PHLX Semiconductor ETF, which is up 22% this year. However, there are indicators suggesting potential recovery for the company [1]. Company Overview - Onsemi, formerly known as ON Semiconductor, primarily manufactures chips for automotive (52% of revenue) and industrial (28% of revenue) applications, with the remaining 20% from data centers, 5G, and other sources [1]. - The company is a leader in silicon carbide chips, which are more energy-efficient than traditional silicon, particularly beneficial for electric vehicles (EVs) [2]. Market Position and Growth Potential - Silicon carbide is currently used in only 22% of EV production, and without Tesla, the penetration drops to 6%. This indicates significant growth potential for Onsemi's silicon carbide products [2]. - Despite a 1% revenue drop in 2023 and a 17% decline in Q2 2024, the overall EV market is showing resilience, with global EV sales volumes up 22% in the first half of 2024 compared to the same period in 2023 [4][5]. Financial Performance - Onsemi has maintained a gross margin of 45%, with a decrease of less than 200 basis points since Q1 2023, showcasing its ability to remain profitable despite production declines [6]. - The company's utilization rate has decreased nearly 20% from its peak to 65%, yet it has managed to sustain higher gross margins compared to historical lows [6]. Strategic Partnerships - A recent deal with Volkswagen positions Onsemi as the primary supplier of power box solutions, which is a positive indicator for future demand, given Volkswagen's status as a top EV seller [7]. Valuation and Analyst Outlook - Onsemi's forward P/E ratio of 18x is 35% below the median of a peer group of 43 large-cap semiconductor companies, suggesting a favorable valuation [8]. - The average price target for Onsemi implies an upside of 18%, with some analysts projecting an upside of 43% [9].

On Semiconductor (NASDAQ: ON ), also known by Onsemi, has been struggling (Figure 1) more than its peers. Q2 2024 revenue was $1.735 billion, a 17% decrease from the same quarter in 2023. The industry faces problems because auto manufacturers invested in excess inventory after theInvesting in high-growth opportunities across industries, employing a value investing approach that prioritizes robust business models and strategic foresight. Focusing on companies with the potential to profoundly influence the gl ...

The latest trading session saw ON Semiconductor Corp. (ON) ending at $70.37, denoting a -1.88% adjustment from its last day's close. The stock's change was less than the S&P 500's daily gain of 0.13%. On the other hand, the Dow registered a gain of 0.55%, and the technology-centric Nasdaq decreased by 0.52%.Shares of the semiconductor components maker witnessed a loss of 5.43% over the previous month, trailing the performance of the Computer and Technology sector with its gain of 1.56% and the S&P 500's gai ...

The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?Let's take a look at what these Wall Street heavyweights have to say about ON Semiconductor Corp. (ON) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.ON Semiconductor Corp ...

Core Insights - ON Semiconductor Corporation is experiencing stabilization in the automotive market, with demand being flat to slightly up, attributed to inventory adjustments by customers rather than a full recovery [5][6][7] - The company emphasizes the importance of long-term supply agreements (LTSAs) in managing customer relationships and inventory levels, allowing for better visibility and proactive adjustments [10][12][16] - The automotive supply chain is characterized by customer-specific inventory levels, with some Tier 1 suppliers holding insufficient inventory, raising concerns among OEMs [21][22][24] - The company has a significant presence in the electric vehicle (EV) market, with average content of $750 per EV compared to $50 for internal combustion engine (ICE) vehicles, indicating a strong growth potential in the EV segment [27][28][30] - The silicon carbide market is expected to grow, with ON Semiconductor positioned to benefit from increased penetration in EVs and industrial applications [52][62] Automotive Market Trends - The automotive market is currently mixed, with varying demand trends among competitors, but ON Semiconductor sees some positive signs of stabilization [4][5] - The company has proactively lowered utilization rates in anticipation of market corrections, allowing for better management of inventory and customer demand [9][13] - OEMs are increasingly concerned about low inventory levels among Tier 1 suppliers, which could lead to production disruptions if demand suddenly increases [21][22] Long-Term Supply Agreements (LTSAs) - LTSAs provide ON Semiconductor with a competitive advantage by ensuring ongoing communication with customers regarding demand, allowing for timely adjustments to production [11][12][16] - The number of LTSAs has remained relatively flat, indicating continued customer value in these agreements [16] - The company believes that LTSAs help mitigate the risks associated with inventory management and demand fluctuations [12][16] Electric Vehicle (EV) Market - The average content for EVs is significantly higher than for ICE vehicles, with ON Semiconductor's content for EVs averaging $750, compared to $50 for ICE [27][28] - The company anticipates that the long-term trend will favor EVs, despite short-term challenges such as high interest rates and affordability issues [30][33] - ON Semiconductor is well-positioned in the Chinese EV market, with over 60% of new vehicles featuring its silicon carbide technology [40][41] Silicon Carbide Market - The silicon carbide market is expected to grow, with ON Semiconductor's design wins indicating a strong future demand [52][62] - The company is focused on increasing its market share in both the automotive and industrial sectors, with a significant portion of its revenue coming from silicon carbide products [61][62] - The gross margin for silicon carbide is expected to improve as production scales up, with the company confident in its pricing strategy [56][58]