- Wells Fargo analyst Gary Mobley downgraded Qorvo, Inc QRVO from Overweight to Equal-Weight and an $85 price target.
- To accompany his September quarter EPS preview note, he re-rated.
- However, he did not revise his below-consensus FY24 and FY25 (although we saw a risk to consensus estimates).
- His lower price target factored in lower peer group multiples and the assumption that QRVO may trade at a discount to the broader chip sectors until the company can diversify the business away from Apple Inc AAPL and the mobile phone market.
- His price target assumed QRVO shares traded at only 17.0x our NTM EPS estimate (versus SOX, SWKS & QCOM at 17.0x, 10.0x & 12.0x, respectively).
- The discount relative to the rest of the chip sector may be a permanent fixture in the valuation consideration for QRVO, given the company’s high exposure to smartphones and Apple.
- Price Action: QRVO shares traded lower by 2.92% at $79.57 on the last check Tuesday.
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