Content And Share Gain Expectations Driving Outperformance At ON Semi

I really can’t complain about ON Semiconductor’s (ON) performance since my last update, as the shares have dramatically outperformed the semiconductor rally and risen by more than a third. While power management companies (including ON, Infineon (OTCQX:IFNNY), and STMicro (STM) ) have done a little better with respect to performance and guidance than others like Texas Instruments (TXN), Maxim (MXIM), and NXP (NXPI), it seems like ON in particular has regained investor interest on the back of solid wins, improving bookings, and management’s confidence that revenue will grow in 2019.

I still like ON shares, but not as much as I did back in December. The semiconductor sector as a whole has a lot riding in terms of guidance on a second half rebound and I think it may be premature to just rule out another round of guidance cuts due to weaker conditions in China (autos and manufacturing) and emerging weakness in Europe (Germany and Italy). I think ON shares should now be trading closer to the mid-$20’s, but it may make sense to let things simmer down a bit first.

Click here for more:
Content And Share Gain Expectations Driving Outperformance At ON Semi