Will This Upgrade Help ON Semiconductor (ONNN) Stock Today? (Update)

Update (9:45 a.m.): Updated with Tuesday market open information.

NEW YORK (TheStreet) -- MKM Partners upgraded ON Semiconductor  (ONNN) to "buy" from "neutral" and set a $13 target price. The firm cited valuation as the reason for the move.

The stock was up 2.3% to $9.80 at 9:43 a.m. on Tuesday.

Must Read: Warren Buffett's 10 Favorite Growth Stocks

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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Separately, TheStreet Ratings team rates ON SEMICONDUCTOR CORP as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate ON SEMICONDUCTOR CORP (ONNN) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • ONNN's revenue growth has slightly outpaced the industry average of 5.2%. Since the same quarter one year prior, revenues slightly increased by 5.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The strong earnings growth this company has enjoyed -- up -- has apparently played a role in driving up its share price by a solid 25.80%. In addition, the rise in the general market has likely contributed to this stock's strong performance during this past year.Regarding the stock's future course, although almost any stock can fall in a broad market decline, ONNN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • ON SEMICONDUCTOR CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ON SEMICONDUCTOR CORP turned its bottom line around by earning $0.33 versus -$0.20 in the prior year. This year, the market expects an improvement in earnings ($0.77 versus $0.33).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 120.8% when compared to the same quarter one year prior, rising from -$138.20 million to $28.70 million.
  • 39.89% is the gross profit margin for ON SEMICONDUCTOR CORP which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, ONNN's net profit margin of 3.99% significantly trails the industry average.
  • You can view the full analysis from the report here: ONNN Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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