ON Semiconductor enters the second half of June with a split personality: short sellers are unwinding at pace, yet the options market just fired its most defensive signal in months — and the stock is sitting roughly 10% above where most of the Street has its price target.
The short side has turned markedly less aggressive over the past week. Short interest fell 11% across the past five trading days to 7.5% of the free float, reversing a brief rebuild that pushed positions back above 34 million shares in early June. The lending market tells the same story: availability is exceptionally loose at 1,259% — meaning roughly 13 shares are available to borrow for every one currently lent out — and borrow costs are running at just 0.46%. There is no squeeze pressure here. The ORTEX short score has also drifted lower all week, easing from 48.4 on June 4 to 45.2 by June 11, reflecting the reduced short conviction.
Options positioning cuts the other way, and sharply so. Thursday's session produced a put/call ratio of 0.79 — nearly double the 20-day average of 0.48 and more than three standard deviations above it. That is the most elevated defensive reading relative to recent norms in at least several months, even though in absolute terms 0.79 is not extreme. The move is notable because the prior 19 sessions had clustered tightly between 0.40 and 0.55. Something shifted in options desks on June 12, and it reads as a sudden demand for downside protection on a stock that has already rallied 12% over the past month.
The Street is broadly constructive but not yet willing to chase the price. A wave of target raises followed the May earnings print — Wells Fargo lifted to $140 as recently as June 9, Bank of America moved to $138, and Mizuho went to $150 — yet the consensus target still averages around $106, well below the current $116.79 close. That gap means the stock has effectively run through consensus. Bulls point to the automotive electrification pipeline, GaN design wins, and an EPS growth forecast that has surged dramatically over the past six months. Bears flag inventory management risk, margin compression from pricing pressure in automotive and industrial, and a valuation that is not cheap — EV/EBITDA runs near 19.6x. The forward EPS rank of 97th percentile suggests estimates are moving strongly higher; the short score rank of 34th percentile says short sellers are not particularly crowded relative to the broader universe.
One institutional thread worth watching: JP Morgan Asset Management added over 6.7 million shares in the most recent reported period, a substantial position build that stands out in the holder table. Against that, Slate Path Capital trimmed by 2.7 million shares. The CFO sold roughly $8.2 million in stock across three tranches in April — at prices ranging from $80 to $100 — a sequence that looked considered rather than urgent at the time, but which now sits well below current levels.
The next earnings date is August 3. What to watch between now and then is whether the June 12 options spike proves a one-session anomaly or the beginning of a more sustained shift in how the market is hedging a stock that has outrun its consensus target.
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