Market Overview

Analysts Stick With Skyworks Stances Despite Lower Q1 Guidance

Share:
Analysts Stick With Skyworks Stances Despite Lower Q1 Guidance
Related SWKS
KeyBanc Survey Shows 'Disappointing' iPhone Cycle
22 Stocks Moving In Wednesday's Pre-Market Session

Apple Inc. (NASDAQ: AAPL) supplier Skyworks Solutions Inc (NASDAQ: SWKSwarned of a revenue shortfall for its fiscal first quarter, attributing the downward guidance revision to unit weakness across major smartphone customers.

The Analysts

D.A. Davidson analyst Thomas Diffely reiterated a Buy rating on Skyworks shares and maintained an $85 price target.

Raymond James analyst Chris Caso reiterated a Market Perform rating.

DA Davidson Stays Long-Term Bullish

Skyworks' warning does not come as a surprise, especially after twin pre-announcements by Apple and Samsung Electronics Co Ltd (OTC: SSNLF), two of Skyworks' largest customers, analyst Diffely said in a Wednesday note.

New customer ramps did little to prop up December quarter results, the analyst said. 

D.A. Davidson lowered its December quarter revenue estimate by $30 million and pro forma EPS estimate by 8 cents, but left the rest of its Skyworks model intact. 

This year should be one of transition for RF semiconductor names as increased RF content is offset by macroeconomic- and China-driven weaknesses, Diffely said.

Although the move to 5G is the next big catalyst, it is likely to have a material impact only when 5G handsets start to ramp in 2020, he said. 

With D.A. Davidson already having trimmed its 2019 expectations and price target for Skyworks, it left its calendar 2019 estimates unchanged Wednesday.

The firm said its long-term bullish thesis remains intact.

Raymond James: 'We Still Can't Call The Bottom'

The magnitude of the shortfall Skyworks predicted is in line with Apple's negative preannouncement last week, Raymond James analyst Caso said in a Tuesday note.

With the weakness manifesting in the December quarter as opposed to the firm's expectation of the March quarter, Caso lowered his estimates further, following up on estimate reductions announced last week after Apple's guidance cut. 

Qorvo Inc (NASDAQ: QRVO) could also issue another warning if it sees weakness in December rather than in March, the analyst said. 

"Although expectations throughout the Apple supply chain are quite low, we still can't call the bottom due to our expectations for a weak iPhone 11 cycle in the fall as well as the possibility that Apple could end of life one or more models, as it did last year." 

The Price Action

Skyworks shares were trading up 4.37 percent at $68.04 at the time of publication Wednesday.

Related Links:

S&P 500 Companies On Track For Double-Digit Earnings Growth, Despite Apple Disappointment

Wedbush: Trade War Could Mean Supply Chain Disruption, Higher Costs For Tech Sector In 2019

Latest Ratings for SWKS

DateFirmActionFromTo
Jan 2019Morgan StanleyMaintainsEqual-WeightEqual-Weight
Jan 2019OppenheimerDowngradesOutperformMarket Perform
Jan 2019NomuraDowngradesBuyNeutral

View More Analyst Ratings for SWKS
View the Latest Analyst Ratings

Posted-In: Apple Suppliers Chris CasoAnalyst Color News Guidance Price Target Reiteration Analyst Ratings Best of Benzinga

 

Related Articles (AAPL + QRVO)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
MDRXKeyBancUpgrades0.0
ANETNomuraUpgrades260.0
CNPRBC CapitalUpgrades34.0
FISVOppenheimerUpgrades88.0
FNDUBSUpgrades37.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

5 More Tips For Dealing With Holiday Debt

Urban Outfitters Pops On Analyst Upgrade, Is This An Opportunity To Sell?