UPDATE: Citigroup Reiterates Neutral Rating, Lowers PT on ON Semiconductor

In a report published Wednesday, Citigroup reiterated its Neutral rating on ON Semiconductor (NASDAQ: ONNN), but lowered its price target from $9.00 to $7.50.

Citigroup noted, “We trim EPS, reduce our target to $7.50 from $9 on lower EPS and multiples, and reiterate our Neutral rating for ONNN. The stock could bounce after Thursday's earnings based on low expectations and investors ‘buying the cut', but sustainable outperformance into year-end may be limited by lack of smartphone exposure and difficulty assessing Sanyo GMs. We would potentially become more constructive, all else being equal, if: 1) the 3 pending Sanyo fab closures can convert to improving GMs toward low-30% by year-end, and 2) if we establish confidence Citi's economic surprise index is set to further rebound based on ONNN's high correlation with the index.”

ON Semiconductor closed on Tuesday at $6.94.

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