Skyworks Executive Transition 'Absolutely No Surprise'

On May 12, Skyworks Solutions Inc SWKS announced that Liam Griffin would move from being President to being the CEO of the company, while David Aldrich would go from CEO to Executive Chairman.

B. Riley’s Craig A. Ellis maintained a Buy rating on the company, with a price target of $92.

No Surprises Here

Saying that the announcement did not come as a surprise, Ellis mentioned Griffin had long been viewed “as the only real successor to Aldrich who doesn’t get enough credit as one of the best Execs in Semi’s.”

The analyst also pointed out that Aldrich and Griffin were key to transforming Skyworks Solutions from low single digit operating margins in 2003-2005 to “a company with near sector best financial performance.”

Transforming The Company

The two achieved this by “by shedding low-margin businesses like baseband eight years before the herd while adding organic diversification in RF and Analog and eventually filtering with defensible competencies in each area,” Ellis stated.

Ellis also noted that Skyworks Solutions has “out-thought and out-executed” most of its peers, many of which did not survive, and Mr. Griffin played an important part in this.

The analyst believes there is very little risk of estimates being reset and that there might have been increased conservatism related to the F3Q guidance, given that this change was in the pipeline.