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ON Semiconductor (NASDAQ:ON) just took a nosedive, dropping nearly 7.8% to hit a new 52-week lowafter an analyst at Truist slashed his targets. Meanwhile, Truist downgraded the stock to Hold with a target of $60, down from $85, citing deteriorating demand trends and management's focus on exiting certain business lines this year. The result? Investors are now grappling with questions about revenue and margin pressures just as broader markets face turbulence.
Here's the kicker: ON Semiconductor isn't just another tech stockit's a major player in the global semiconductor game. With $7.38 billion in revenue and $1.76 billion in net income, the company has the numbers to back up its importance in powering industries like automotive and industrial electronics. But with headwinds like reset earnings estimates and a shrinking near-term outlook, the stock's forward P/E ratio of 13.4 may not be enough to reassure skittish investors.
The company's exit strategy for certain business segments and shifting demand dynamics leave many investors wondering: is this the perfect storm or the perfect setup for a rebound? Either way, ON's role in the semiconductor world means it's a stock you can't afford to ignoreeven in its rough patches.
This article first appeared on GuruFocus.