UPDATE: Bank of America Initiates ON Semiconductor at Buy on Positive Sanyo Restructuring

Bank of America published a report Tuesday, as analyst Aashish Rao initiated ON Semiconductor

with a Buy rating and a price objective of $11. Rao wrote, "ON acquired Sanyo's semi division in 2011 but sales declined 40%. However, the company took firm actions - closing two fabs, IT/inventory and site consolidations to lower the quarterly breakeven to current sales levels. Combined with internal fab shutdowns (Aizu), we see gross margins at ONNN expanding 200bp above consensus to 38% exiting 2014. In addition, the 20% fall in Japanese ¥ since Dec is expected to add ~150bp to op margins. Mobile could grow double digits from ramps into Samsung, MediaTek with DC-DC power, and RF tuners; share gains on Haswell notebooks could help offset PC sluggishness. After two years in which FCF dropped below 5% of sales, we forecast it to return above 10% in 2013." ON Semiconductor closed Monday at $8.19.