ON Semiconductor Corporation (NASDAQ: ON)

ON Semiconductor Corporation (NASDAQ: ON) operates under the onsemi brand. The Company offers intelligent power and intelligent sensing solutions. 

Recommendation Rationale – Sell at USD 74.39  

• The currency fluctuations, changes in foreign exchange regulations as well as repatriation delays and costs might have a material adverse effect on ON’s results of operations and financial condition.
• The changes in, and the regulatory implementation of, tariffs or other government trade policies or political conditions might reduce demand for the company’s products, limit its ability to sell the products to certain customers or the ability to comply with applicable laws and regulations, which could significantly impact the business and results of operations.
• The company’s share price is trading close to its R1 level recommended on June 26, 2024. Therefore, there can be a possible decline from the specified resistance levels.

ON’s Daily Price Chart

Fundamental Valuationx

ON is exposed to the risks related to general economic conditions such as changes in the macroeconomic environment, the negative impact of geopolitical uncertainties, etc. Therefore, ON is expected to trade at slight discount considering the risks associated. For conducting the valuation, the following peers have been considered: Infineon Technologies AG, Vishay Intertechnology Inc, etc. 

Hence, a ‘Sell’ rating has been provided on the stock at the closing price of USD 74.39 per share as on 27^th September 2024

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Note 1: Past performance is neither an indicator nor a guarantee of future performance. 

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 27 September 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.