UPDATE: FBR & Co. Maintains Outperform on ON Semiconductor After CES

In a report published Monday, FBR & Co. analyst Christopher Rolland maintained Outperform on ON Semiconductor Corp. (NASDAQ: ONNN), raising its price target to $10.50 from $8.50. According to the report, ONNN has recently replaced ATML as an FBR Top Pick. “Management's tone was the most constructive we have heard in years, as we are starting to gain confidence that Sanyo has truly bottomed (although it may not be until 1Q14 and could dip modestly below the $150 million mark),” the report said. “The company is continuingly encouraged by the pace of growth in its automotive markets and is currently seeing a better-than-expected recovery in industrial. It also continues to move into more appliances beyond air conditioners, which now include washing machines, dryers, refrigerators, and electric stoves. We note the importance of the company's industrial segment, as gross margins are in the 60%'s, well above the company's 35% average today. As durables spending accelerated in 2014, we believe this can be a meaningful driver of mix and margin benefits.”Some highlights from the report included:-Consumer and even PC segments may have stabilized.-Channel work indicates inventories are lean and lead times are still relatively short.-Avago's acquisition of LSI is a game changer for valuation.ONNN closed Friday at $8.61 with shares trading up at 1.53 percent.