In a research report published Tuesday, Canaccord analyst Michael Walkley reiterated a Buy rating on shares of Skyworks Solutions Inc (NASDAQ:SWKS), while reducing the price target to $120 (from $132), due to the removal of the potentially accretive PMC-Sierra acquisition from his forward estimates. The reduced target follows the news that the company has decided not to modify its merger agreement with PMC-Sierra and PMC-Sierra terminated the agreement.
Walkley noted, “We are impressed with Skyworks’ discipline in pursuing its financial targets and walking away from the bidding war for PMC. While we believe Skyworks will use its strong balance sheet of over $1B in net cash to pursue other accretive acquisitions, we also believe its core business trends remain strong. However, we are removing PMC from our forward estimates now that the deal has been terminated. We believe Skyworks’ broad portfolio of custom integrated solutions should enable dollar content share growth in both Apple’s and Samsung’s upcoming premium tier smartphones and grow content share in the fast growing Chinese LTE smartphone market. We also believe Skyworks’ diverse analog portfolio positions its broad market division for 20% plus annual growth driven by content share in markets such as 802.11ac, wireless infrastructure, and the IoT market.”
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 16.1% and a 61.6% success rate. Walkley has a 46.5% average return when recommending SWKS, and is ranked #17 out of 3636 analysts.
Out of the 21 analysts polled by TipRanks, 18 rate Skyworks Solutions stock a Buy, while 3 rate the stock a Hold. With a return potential of 40.5%, the stock’s consensus target price stands at $111.94.