Shares of ON Semiconductor (NASDAQ:ON) climbed 5% on Monday after Citi moved to raise its price target and placed the company on an upside Catalyst Watch in the run-up to the firm's September Analyst Day.
Citi increased its target on ON Semiconductor from $100 to $120. The new target equates to a 20X price-to-earnings multiple on the bank's 2028 estimated earnings, compared with the stock's three-year average multiple of 17X. Despite the higher target multiple, Citi maintained a Neutral rating on the shares.
Alongside the target revision, Citi raised its earnings-per-share forecasts for calendar years 2026, 2027, and 2028 by 1%, 12%, and 9%, respectively, taking those estimates to $3.07, $4.64, and $6.00. The firm said the upward revisions reflect expected price increases and what it described as an extended recovery in the analog semiconductor market.
In addition to the target and EPS updates, Citi initiated a 90-day upside Catalyst Watch for ON Semiconductor ahead of the company's Analyst Day scheduled for September. The bank said it expects the company to provide further detail on its data center revenue opportunity and to highlight progress with silicon carbide and vertical gallium nitride technologies, as well as developments on the Treo platform, which Citi characterizes as margin-accretive.
Citi also indicated it anticipates presenting a higher target model at the Analyst Day driven by the companys power products and a renewed uptick in the silicon carbide business. The bank tied that anticipated momentum in silicon carbide to the 800V DC transition in the automotive sector, suggesting the transition could support stronger positioning for ON Semiconductor in that market.
Context and implications
The combination of a raised price target, higher multi-year EPS estimates and an explicit Catalyst Watch underscores Citi's view that the company could articulate a clearer growth runway at the upcoming Analyst Day, particularly around data center power and advanced power semiconductor technologies. Citi's actions prompted the immediate market response reflected in the stock's intraday gain on Monday.
What is not changed
Citi retained a Neutral rating on ON Semiconductor despite the higher target and estimates.