ON Semiconductor Corp. (ON) First Take Upside to quarter, with solid guidance

Equity Research 3 August 2026 | 4:39PM EDT

ON Semiconductor Corp. (ON): First Take: Upside to quarter, with solid guidance

Key stock takeaways: We expect the stock to trade higher following a quarter where James Schneider, Ph.D. | revenue and EPS were above the Street, coupled with a backdrop of relatively muted Goldman Sachs & Co. LLC expectations and positioning heading into the quarter. We believe investors are Khalil Fenina likely to focus on management’s commentary on: (1) order trends in the industrial | and automotive verticals; (2) signs of any potential pull-forward in demand; (3) Goldman Sachs & Co. LLC

forward commentary on channel inventories; (4) any update to management’s views Anmol Makkar | on 2026. Goldman Sachs & Co. LLC Read-through to our coverage: We expect a modestly positive reaction for the Luya You | analog group. We would expect the most direct read-across for ADI (Buy) and NXPI Goldman Sachs & Co. LLC (Buy) given their relatively high automotive exposures.

Quarterly results above the Street on revenue and EPS: onsemi reported 2Q revenue of $1.60 bn, just below GS at $1.62 bn but above the Street (Visible Alpha Consensus Data) at $1.59 bn. Gross margin of 39.3% was below GS at 39.7% but above the Street at 39.1%. EPS of $0.74 was slightly below GS at $0.76 but above the Street at $0.71.

3Q revenue and EPS guidance is just above the Street. onsemi guided 3Q just above the Street on revenue and EPS. Revenue was guided to $1.70 bn at the midpoint, which brackets GS at $1.73 bn and the Street at $1.67 bn. Gross margin guidance of 41% is just below GS at 41.1% but above the Street at 40.3%. Adjusted EPS guidance of $0.81 - $0.93 (midpoint $0.87) was just below GS at $0.91 but above the Street at $0.84.

Price target. Our 12-month target price of $95 is based on a 20X multiple of our normalized EPS forecast of $4.75. Key upside/downside risks: (1) any demand weakness, particularly in the Automotive end market, could drive downside; (2) gross margin execution and the timing around the actualization of self-help initiatives could drive earnings upside or downside.

Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.

Goldman Sachs ON Semiconductor Corp. (ON)

Exhibit 1: ON - Variance summary 2Q26 Financials ($ mn, except EPS) Actual GS Street Actual/GS Actual/Street Total Revenue 1,604 1,616 1,589 -0.8% 0.9% QoQ 4.8% 7% 5.0% YoY 10.9% 10% 8.2% Gross Margin (excl. SBC) 39.3% 39.7% 39.1% -43 bps +17 bps EPS (incl. SBC) $0.74 $0.76 $0.71 -2.5% 3.5%

Source: Company data, Goldman Sachs Global Investment Research, Visible Alpha Consensus Data

Exhibit 2: ON - Guidance summary 3Q26E Financials ($ mn, except EPS) High Low Midpoint GS Street vs. GS vs. Street Total Revenue 1,750 1,650 1,700 1,727 1,673 -1.6% 1.6% QoQ 9.1% 2.9% 6.0% 7.7% 4.3% YoY 19.2% 12.3% 17.6% 11.4% 7.9% Gross Margin (excl. SBC) 42.0% 40.0% 41.0% 41.1% 40.3% -7 bps +68 bps EPS (incl. SBC) $0.93 $0.81 $0.87 $0.91 $0.84 -4.1% 4.1%

Source: Company data, Goldman Sachs Global Investment Research, Visible Alpha Consensus Data

ON 12m Price Target: $95.00 Price: $81.61 Upside: 16.4%

Neutral GS Forecast 12/25 12/26E 12/27E 12/28E Market cap: $33.3bn Revenue ($ mn) 5,995.4 6,645.8 7,373.9 7,972.4 Enterprise value: $34.4bn EBITDA ($ mn) 1,763.5 2,428.9 2,554.4 2,959.9 3m ADTV: $1.3bn EBIT ($ mn) 1,119.5 1,498.7 1,956.4 2,361.9 United States EPS ($) Americas Semiconductors & IT P/E (X) Services EV/EBITDA (X) M&A Rank: 3 FCF yield (%) 7.0 2.9 6.9 7.0 Dividend yield (%) -- -- -- -- Net debt/EBITDA (X) 0.5 0.5 0.2 0.0

3/26 6/26E 9/26E 12/26E EPS ($)

Source: Company data, Goldman Sachs Research estimates, FactSet. Price as of 31 Jul 2026 close.