Oppenheimer’s top analysts are weighing in today on semiconductor firm Skyworks Solutions Inc (NASDAQ:SWKS), and software giant Microsoft Corporation (NASDAQ:MSFT), after the companies impressed the Street last night with their quarterly earnings reports.
Skyworks Solutions Inc
Skyworks Solutions shares rose nearly 5% Friday, after the company reported better-than-expected December quarter results, with revenue, gross margin and EPS all better than expected. Revenue guidance into March was lower than expected, which is not surprising given what has transpired with the rest of the Apple supply chain.
After reviewing the earnings, Oppenheimer analyst Rick Schafer issued a report reiterating his Outperform rating and $100 per share price target on SWKS.
Schafer observed, “We are reiterating our Outperform on SWKS after the company delivered F1Q (Dec) sales/EPS of $927M/$1.60, besting consensus $920M/$1.58E. F2Q (Mar) outlook is being impacted by iP6s inventory reductions, with revenues expected down 16% Q/ Q to $775M, well shy of expected $816M. We view this cut as removing the well telegraphed ‘Apple overhang’ that has impacted the supply chain since late 2015 and look for shares to trade better Friday as investors shift focus from near term downside risk to 2H re-acceleration and upside ahead of the iP7 launch. SWKS remains uniquely positioned to benefit from rising RF content trends, which should see overall RF content up another 20% in 2016.”
According to TipRanks.com, which holds bloggers and financial experts accountable for what they write by tracking how their stock picks perform over time, analyst Rick Schafer has a yearly average return of 20.2% and a 64% success rate. Schafer has a 49% average return when recommending SWKS, and is ranked #7 out of 3594 analysts.
Out of the 18 analysts polled by TipRanks, 17 rate Skyworks Solutions stock a Buy, while 1 rates the stock a Hold. With a return potential of 60.3%, the stock’s consensus target price stands at $103.88.
In addition, Oppenheimer analyst Shaul Eyal reiterated an Outperform rating on shares of Microsoft, with a price target of $56, after the company delivered solid fiscal second quarter results, posting solid headline numbers that beat Street estimates on the top and bottom line, driven by commercial cloud.
Eyal commented, “MSFT’s ongoing transition under CEO Nadella continues to make headway into new territories. 2QFY16 results recorded healthy revenue and op. margin performance despite continued FX headwinds. While in line with the S&P 500’s YTD performance (-7.7%) MSFT can remain a solid investment vehicle if it continues to show: 1. strong Cloud Services performance (up 140% constant currency YoY); 2. continued operational discipline supporting margin improvement; 3. strong commercial presence via Dynamics and Office 365; 4) clear product roadmap supporting further acceleration. MSFT continues to position itself as one of two cloud infrastructure related market leaders.”
According to TipRanks.com, analyst Shaul Eyal has a yearly average return of 8.6% and a 54.4% success rate. Eyal has an 20.5% average return when recommending MSFT, and is ranked #97 out of 3594 analysts.