UPDATE: Goldman Sachs Upgrades ON Semiconductor to Buy on Higher Margin Outlook, Sanyo Accretion

Goldman Sachs upgraded ON Semiconductor

from Neutral to Buy and raised the price target from $7.50 to $11.00. Goldman Sachs analyst James Schneider wrote, "We see upside to earnings over the next 4-6 quarters driven by (1) strong progress toward ON's gross margin target of 41% (from 33% in 2012), driven by cyclical recovery and restructuring actions such as the Aizu fab closure, with 200-300bp upside to Street margin in our base case and 600bp upside if ON hits its target, (2) accretion from Sanyo, starting in 3Q13 after several quarters of losses, and (3) design wins in smartphones and automotive." ON Semiconductor closed at $8.10 on Thursday.