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Oppenheimer On Skyworks: 'We Liked It At $110; We Love It At $89'

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In a report published Wednesday, Oppenheimer analyst Rick Schafer reiterated an Outperform rating and price target of $120 on Skyworks Solutions, Inc. (NASDAQ: SWKS). The analyst believes that the recent 15 percent decline in the share price offers an attractive long term investment option.

Although the company reported strong beat and raise results, the stock has declined, which the analyst believes was due to the weak C3Q outlook announced by Qorvo, Inc. (NASDAQ: QRVO), sympathy for Apple, Inc. (NASDAQ: AAPL), along with concerns regarding handset inventory.

"Importantly, SWKS has never missed a quarter on China-related weakness and has a track record of guiding that business conservatively," Schafer said, while mentioning, "Increasing RF content remains an early stage story with bandcounts rising as 4G penetration deepens."

The analyst believes that the company is well positioned and that its growth story is still in its early innings. Skyworks Solutions continues to achieve content gains at its biggest customer, Apple; the analyst expects a content increase of 20-25 percent in the iPhone 6 compared to the iPhone 5s.

Another 15-20 percent increase is expected during the iPhone refresh this fall. This would help offset any seasonal unit slowdown, ahead of Skyworks Solutions' network refresh.

According to the Oppenheimer report, "Rising RF complexity and content with the move from 3G to 4G devices remains our favorite growth theme into 2016. SWKS remains the top "pure-play" on this trend, with nearly 80% exposure."

Latest Ratings for SWKS

Aug 2018Morgan StanleyMaintainsUnderweightUnderweight
Jul 2018B. Riley FBRMaintainsBuyBuy
Jul 2018Morgan StanleyMaintainsUnderweightUnderweight

View More Analyst Ratings for SWKS
View the Latest Analyst Ratings

Posted-In: Oppenheimer Rick SchaferAnalyst Color Long Ideas Reiteration Analyst Ratings Trading Ideas


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