ON Semiconductor's Q4 Revenues Down 15% As Automotive Industry Hits Massive Speed Bump, 7 Analysts Cut Forecasts On Continued Demand Weakness

Core Viewpoint - ON Semiconductor Corp reported a significant decline in fourth-quarter revenues, with analysts providing mixed ratings and price target adjustments amid ongoing demand challenges, particularly in the automotive sector. Financial Performance - Fourth-quarter revenue was reported at $1.72 billion, down 2.2% sequentially and 14.6% year-on-year, missing the midpoint of guidance [2] - First-quarter revenue guidance implies an 18.7% sequential decline and a 24.8% year-on-year decline [3] - Non-GAAP earnings guidance for the first quarter is set between 45 cents to 55 cents per share, lower than the analyst estimate of 91 cents per share [3] Analyst Ratings and Price Targets - Stifel analyst maintained a Hold rating, reducing the price target from $60 to $52 [2] - Roth Capital Partners maintained a Buy rating, cutting the price target from $100 to $60 [4] - Morgan Stanley reaffirmed an Underweight rating, lowering the price target from $52 to $44 [5] - JPMorgan reiterated a Neutral rating, reducing the price target from $88 to $60 [8] - Needham maintained a Buy rating, decreasing the price target from $66 to $57 [10] - Rosenblatt Securities reaffirmed a Neutral rating, slashing the price target from $75 to $49 [12] - Goldman Sachs maintained a Buy rating, reducing the price target from $77 to $64 [14] Market Challenges - The company faces ongoing challenges in automotive EV demand, particularly in Asia, impacting near-term outlook and visibility [4] - A projected 19% sequential decline in revenues for the first quarter is primarily driven by a 25% decline in automotive revenues due to inventory digestion at Chinese customers [6][8] - The sluggishness in the China SiC business and unfavorable pricing dynamics in non-core businesses are contributing to revenue headwinds [9] Strategic Adjustments - ON Semiconductor is managing its inventory and business portfolio to maintain profitability amid demand challenges [4] - The company is pulling out of low-margin businesses due to unfavorable pricing [9][11] - Management is committed to optimizing the manufacturing footprint and business portfolio, with potential for above-average margin expansion post-downturn [14][15]