In a research report published Friday, Brean Capital analyst Mike Burton maintained a Buy rating on Skyworks Solutions (NASDAQ:SWKS) and raised his price target to $92 (from $70), as the company announced another beat-and-raise quarter with solid December results and increased March quarter guidance on mobile and non-mobile strength.
Burton observed, “The December quarter upside was predominately driven by the Integrated Solutions segment as Apple’s iPhone 6/6+ ramped. Looking forward, we believe LTE growth in China and several new model ramps (Samsung Galaxy S6 amongst others to be unveiled in Barcelona) coupled with SWKS’ less seasonal Broad Markets business is driving the better-than-seasonal guidance for the March quarter.”
The analyst explained his new price target, “Our target price of $92 for SWKS is based off a 12.5x EV/EBIT (non-GAAP) of our CY16 estimates, which is in line with the current median EV/EBIT multiple of 12.7x for the Semiconductor Group, and a discount to the 14.0x average. On a P/E basis, our $92 target represents a 16.5x multiple of our CY16 nonGAAP EPS estimate of $5.59, which is in line with the current Semiconductor Group multiple of 16.4x CY15 estimates and a discount to the average of 19.1x.”
Skyworks Solutions, Inc., together with its subsidiaries, designs, develops, manufactures, and markets analog and mixed signal semiconductors worldwide.