Oppenheimer On Skyworks: 'It's All About Bandwidth'

In a report published Friday, Oppenheimer analysts maintained an Outperform rating on

, with a price target of $110, after the company reported its results ahead of expectations. Skyworks Solutions reported its F2Q sales and EPS at $762M and $1.15, respectively, both ahead of consensus estimates. The beat was driven by "iPh6/+ demand/content gains as well as GS6 pre-launch builds/content adds." In the report Oppenheimer noted, "With RF content approaching $5.00 on AAPL's iPhone 6/+ (+20/25% vs. iP5s), SWKS appears to be in pole position for content gains on iPh6"s", as higher band counts, receive diversity, MIMO, CA and ET all drive higher levels of integration. We est. content could increase 15% vs. the iP6." The company's content is expected to have surged jumped 30-35 percent in GS6 vs GS5, since Samsung seems to have adopted Skyworks Solutions' fully integrated SkyOne Ultra module. The analysts expect the company to continue to generate growth in 2H15, in view of its majority attach rate on leading China baseband reference designs. "SWKS' systems-level approach coupled with higher levels of integration/ customization improves visibility, socket "stickiness" and GM. Accordingly, GM was guided up 170bps Q/Q to 48%, with incremental GM now at 55%," the analysts wrote. The EPS estimates for CY15 and CY16 have been raised from $5.01 to $5.32 and from $5.45 to $5.80, respectively.