D.A. Davidson Reiterates on Skyworks Solutions
In a report published Friday, D.A. Davidson & Co. analyst Thomas Diffely reiterated a Buy rating on Skyworks Solutions (NASDAQ: SWKS), raising its price target to $40.00 from $35.00.
According to the report, the price target rise reflects strong leverage to the tier-1 handset OEMs, operational excellence, HPA design wins and meaningful valuation discount to the peer group.
“Current trends in the mobile segment are tracking in line with our expectations as a decline in Apple (AAPL - $554.25)-related business (from record levels) is expected to be partially offset by a Samsung capacity ramp ahead of the GS5 launch (projected in early 2Q),” the report noted. “Mid-to-longer term drivers remain intact: significant exposure to tier-1 OEMs, the ongoing 4G LTE proliferation, solid smartphone unit growth (specifically in China) and further traction with the high margin SkyOne product (two customers in production).”
Some potential risks included lower than expected revenue due to a possible inventory buildup, slower than expected key product ramps and general macro economic weakness.
SWKS closed Thursday at $28.62.
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