ON Semi (NASDAQ:ONNN) Outlook Stronger on Auto Demand

Auto demand should allow ON Semi (NASDAQ:ONNN) better than Linear Tech (Nasdaq:LLTC), which gave soft guidance recently.

Canaccord says, "We are increasing our price target for On Sem ahead of what we believe will be a near-term rebound for automotive demand and a longer-term meaningful contribution to the bottom line by Sanyo. In our view, the stock has overreacted to weak guidance by Linear Tech (Nasdaq:LLTC), given Linear's soft outlook was exacerbated by the loss of a key tablet socket. Counter to Linear's comments, we are seeing some recovery for automotive semiconductor demand, a vertical where ONNN has atypically high exposure. We also believe investors will continue to warm to the Sanyo deal, as the extent of potential accretion by 2013 becomes more broadly understood.

"Q4/10E remains $575.0 million; C2010 remains $2.309 billion; C2011 remains $2.411 billion (excludes Sanyo acquisition)...Q4/10E remains $0.21; C2010 remains $0.87; C2011 remains $0.93."

Canaccord Genuity maintains a "Buy" rating on ON Semi (ONNN), which closed Thursday at $11.07, losing $0.15, or 1.34 percent. Canaccord increased their price target on 'ON Semi' from $10 to $13.