Barclays Turns Bullish On Qorvo, Projects Larger Apple Relationship

Qorvo Inc QRVO is likely to gain some bulk acoustic wave share at Apple Inc. AAPL, with more likely in 2019, Barclays said in an upgrade note. 

BAWs are filters used to solve interference and co-existence challenges that are used in smartphones, base stations, repeaters, Wi-Fi applications and more. 

The Analyst

Barclays analyst Blayne Curtis upgraded Qorvo from Equal-weight to Overweight with an $87 price target. 

The Thesis

Risk exists for Qorvo's June quarter guidance in light of Apple's iPhone shipment weakness, Curtis said in a Tuesday note. Investors will soon begin to focus on the second half, as both Apple and Samsung Electronics Co Ltd SSNLF could drive revenue and gross margins, the analyst said. 

"We believe both QRVO and Skyworks Solutions Inc SWKS can work given double-digit content gains this year." 

Barclays' June quarter expectations of $666 million in revenue and EPS of $1.02 are below consensus expectations and call for a sequential drop.

Qorvo is likely to pick up some share at the expense of Broadcom Inc AVGO, both in the LCD models of iPhones and at Samsung, where it consolidated the mid-to-high packet assembler/disassembler share, Curtis said.

Barclays forecast a 24-percent increase in Qorvo's blended component content at Apple.

The Price Action

Qorvo shares were rallying 6.5 percent to $71.79 at the time of publication Tuesday. 

Related Links:

Soft Apple, Samsung Handset Demand A Common Theme Across Semiconductor Stocks, KeyBanc Says In Earnings Preview

Analyst: 5 Headwinds Facing Skyworks Solutions

Photo courtesy of Apple. 

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorUpgradesPrice TargetAnalyst RatingsApple SuppliersBarclaysBlayne Curtis
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!