D.A. Davidson Explains What Is Working For Skyworks

Shares of Skyworks SWKS are ticking higher following strong quarterly results and even better guidance.

D.A. Davidson analyst Thomas Diffely boosted his price target on the stock to $65.00 and reiterated a Buy rating.

Explaining strength in Skywork’s business, Diffely wrote, “The core PA business is ramping due to Apple’s (AAPL - $93.09) upcoming iPhone 6 launch, ongoing 4G LTE buildout in China and even 3G upgrade cycles in some emerging economies… The Integrated Mobile business is benefiting from broad-based content gains and rising device complexity, and the ongoing adoption of 802.11ac. Finally, the proliferation of connectivity (Internet of Things - IoT) continues to drive the high margin Broad Markets segment.”

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Diffely now thinks that the robust strength in Skywork’s business will allow the company to earn an annual $5.00 per share in the next couple years.

The $65 price target is based on 15 times 2015 earnings plus net cash.

Shares of Skyworks were last trading at $50.22, up 8.39 percent.