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. 

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Photo courtesy of Apple.