Merrill Lynch analyst Vivek Arya recently held management and investor meetings with Qorvo Inc (NASDAQ:QRVO) CEO Bob Bruggeworth and newly appointed CFO Mark Murphy. Following these meetings, which to Arya only served to further “reinforce compelling risk-reward opportunity,” the analyst reiterated a Buy rating on QRVO with a $70 price target, which marks a 28% increase from where the shares last closed.

Arya pointed to a few key takeaways from the meetings: “1) RF pricing is firm, and the recent GM dip related to fixable (by mid-17E) input cost/design/manufacturing yield issue; no change to our longer-term GM/OM targets; 2) Despite Apple ’s slowdown, QRVO is the only major RF vendor to grow sales in 2016, with continued 10-15% industry growth for the next few years driven by surging mobile data demand and increasing RF design complexity; 3) High barriers to entry and strong demand in premium RF/BAW filters, expect to maintain l-t duopoly with AVGO.”

Arya believes, “We see QRVO as a noisy (volatile) but interesting house (stock) in a desirable neighborhood (RF semis) which is probably the only “cheap” growth sector left in semis […] The next 6 months could stay volatile as we wait to see consumer/investor reaction to Apple’s iPhone 7, but longer-term the sector remains a compelling opportunity in our view.”

For now, Arya views a shining path ahead for Qorvo of “strong growth, fixable execution, compelling valuation.”

As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, five-star analyst Vivek Arya is ranked #325 out of 4,110 analysts. Arya has a 55% success rate and gains 11.4% in his average returns. When recommending QRVO, Arya earns 6.2% in average profits on the stock.

TipRanks analytics exhibit QRVO as a Buy. Based on 16 analysts polled in the last 3 months, 8 rate a Buy on Qorvo, 7 maintain a Hold, while 1 issues a Sell. The consensus price target stands at $62.08, marking a 14% upside from where the stock is currently trading.

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