Advertisement
Canada markets close in 4 hours 50 minutes
  • S&P/TSX

    21,609.54
    +21.66 (+0.10%)
     
  • S&P 500

    5,474.11
    +0.88 (+0.02%)
     
  • DOW

    38,757.11
    -20.99 (-0.05%)
     
  • CAD/USD

    0.7287
    -0.0003 (-0.04%)
     
  • CRUDE OIL

    81.36
    +1.03 (+1.28%)
     
  • Bitcoin CAD

    88,640.62
    -1,444.88 (-1.60%)
     
  • CMC Crypto 200

    1,331.92
    -57.48 (-4.13%)
     
  • GOLD FUTURES

    2,338.10
    +9.10 (+0.39%)
     
  • RUSSELL 2000

    2,025.02
    +3.01 (+0.15%)
     
  • 10-Yr Bond

    4.2500
    -0.0290 (-0.68%)
     
  • NASDAQ

    17,824.40
    -32.62 (-0.18%)
     
  • VOLATILITY

    12.67
    -0.08 (-0.63%)
     
  • FTSE

    8,188.35
    +46.20 (+0.57%)
     
  • NIKKEI 225

    38,482.11
    +379.67 (+1.00%)
     
  • CAD/EUR

    0.6783
    -0.0004 (-0.06%)
     

ON Semiconductor Corporation (NASDAQ:ON) First-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For This Year

Shareholders of ON Semiconductor Corporation (NASDAQ:ON) will be pleased this week, given that the stock price is up 14% to US$70.16 following its latest quarterly results. ON Semiconductor reported US$1.9b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.04 beat expectations, being 4.4% higher than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for ON Semiconductor

earnings-and-revenue-growth
earnings-and-revenue-growth

Following the recent earnings report, the consensus from 31 analysts covering ON Semiconductor is for revenues of US$7.21b in 2024. This implies a not inconsiderable 12% decline in revenue compared to the last 12 months. Statutory earnings per share are expected to plunge 24% to US$3.82 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$7.49b and earnings per share (EPS) of US$4.11 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

ADVERTISEMENT

The analysts made no major changes to their price target of US$83.58, suggesting the downgrades are not expected to have a long-term impact on ON Semiconductor's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values ON Semiconductor at US$104 per share, while the most bearish prices it at US$55.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 15% annualised decline to the end of 2024. That is a notable change from historical growth of 11% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 17% annually for the foreseeable future. It's pretty clear that ON Semiconductor's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for ON Semiconductor going out to 2026, and you can see them free on our platform here.

It might also be worth considering whether ON Semiconductor's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.