Citi Has Buy On ON Semiconductor After Earnings

Citi Investment Research is out with a research report on ON Semiconductor ONNN and it has a $17 price target on shares and a Buy rating. In a note to clients, Citi Investment Research writes, "ONNN ticked down 4.3% after market, we think because GM missed guidance by 180bps in 2Q and was guided to drop 20bps more in 3Q. GM pressure was mainly due to: 1) worse-than-expected margin impact from Japan's production disruption, 2) increasing commodity price and foreign currency headwinds, and 3) soft orders from customer destocking resulting in lower utilization. We view the margin contraction a temporary effect and expect GM to expand in 4Q/1Q driven by Sanyo margin improvement helped by operational support, fab consolidation and cost saving initiatives (Fig 1)." Shares of ONNN gained 21 cents in Wednesday to close at $8.57 yesterday.