Canaccord’s technology analyst Michael Walkley weighed in today with a favorable report on Skyworks Solutions Inc (NASDAQ:SWKS), as recent surveys indicate strong demand for the new Apple Inc. (NASDAQ:AAPL) iPhone 6S products. The analyst anticipates very strong fourth-quarter iPhone sales and continued high-end smartphone market share gains for Apple versus high-tier Android OEMs, particularly Samsung.
Walkley wrote, “Based on our analysis, industry conversations, and initial iPhone 6S teardown reports, we believe Skyworks has increased its dollar content in the recently launched iPhone 6S/6S Plus smartphones by roughly 15% versus the iPhone 6/6 Plus models.” The analyst continued, “Given Skyworks’ strong dollar content in the new iPhones and our recently raised iPhone estimates, we are slightly increasing our Skyworks estimates. Despite some weak trends in June quarter global smartphone sales, we believe Skyworks’ strong June quarter results and September quarter guidance were driven by RF content share in the iPhone 6 and Samsung’s Galaxy S6 smartphones as well as additional content share gains in the new iPhone 6S smartphones. Also, growing traction in its non-handset broad markets business that grew 22% Y/Y in Q3/F’15 helped drive the strong results and margins.”
The analyst concluded, “We believe Skyworks’ broad portfolio of custom integrated solutions should enable dollar content share growth in both Apple’s and Samsung’s upcoming premiumtier smartphones, and grow content share in the fast-growing Chinese LTE smartphone market.”
Walkley reiterated a Buy rating on Skyworks Solutions shares, with a price target of $132, which represents a potential upside of 49% from where the stock is currently trading.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Michael Walkley has a total average return of 16.8% and a 58.7% success rate. Walkley has a 57.9% average return when recommending SWKS, and is ranked #19 out of 3764 analysts.
Out of the 20 analysts polled by TipRanks, 18 rate Skyworks Solutions stock a Buy, while 2 rate the stock a Hold. With a return potential of 22.8%, the stock’s consensus target price stands at $109.