ON Semiconductor (NASDAQ:ON) shares gained 5% on Monday after Citi raised its price target on the chipmaker and placed the stock on its Upside Catalyst Watch list ahead of the company’s Analyst Day in September.
The move reflects growing optimism around ON Semiconductor’s exposure to data centre power infrastructure and its long-term growth opportunities in advanced power technologies.
Citi Raises Target Price to $120
Citi increased its price target on ON Semiconductor to $120 from $100 while maintaining its Neutral rating on the stock.
The revised target is based on a valuation of 20 times projected 2028 earnings, above the company’s three-year average multiple of 17 times.
According to the bank, the higher valuation reflects increasing confidence in the company’s ability to benefit from rising demand for power solutions in data centres.
Earnings Forecasts Revised Higher
The brokerage also lifted its earnings per share estimates for calendar years 2026, 2027 and 2028.
Citi now expects earnings of $3.07 per share in 2026, $4.64 in 2027 and $6.00 in 2028, representing increases of 1%, 12% and 9%, respectively, compared with previous forecasts.
The revisions were driven by expectations for higher pricing and a longer-lasting recovery across the analogue semiconductor market.
Catalyst Watch Ahead of September Event
Citi initiated a 90-day Upside Catalyst Watch on the stock ahead of ON Semiconductor’s Analyst Day, scheduled for September.
The bank believes the event could provide investors with greater visibility into the company’s long-term growth strategy and emerging revenue opportunities.
Management is expected to present details on its expanding data centre business while highlighting developments in silicon carbide and vertical gallium nitride technologies.
Focus on Power Portfolio and Silicon Carbide Growth
Citi expects ON Semiconductor to emphasise the potential of its power semiconductor portfolio and provide updates on the Treo platform, which is designed to support margin expansion.
The bank also anticipates renewed momentum in the company’s silicon carbide business, supported by the automotive industry’s transition toward 800-volt direct-current architectures in next-generation electric vehicles.
Analysts believe these trends could contribute to a more ambitious long-term financial model and strengthen the company’s growth outlook in both automotive and industrial markets.