Why This Top Analyst Believes Skyworks Solutions Inc (SWKS) Shares Remain Attractive Ahead of Q4

Skyworks Solutions Inc (NASDAQ:SWKS) is preparing to post its quarterly print on November 3rd, and top analyst Michael Walkley at Canaccord likes the financial odds on back of last night’s fiscal fourth-quarter print from Apple Inc. (NASDAQ:AAPL). As far as Walkley sees the circumstances, the wireless chip giant is “well positioned for strong Q4/F’16 results” amid these “strong September results and guidance” from Apple and subsequently believes SWKS shares remain “attractive.”

As such, the analyst believes improving sales trends for the Apple iPhone will in turn benefit Skyworks’ earnings and reiterates a Buy rating on shares of SWKS with a $92 price target, which represents a 19% increase from current levels.

When assessing the iPhone 6S, Walkley projects SWKS content improved from $5.50 to around $6.00.

From the analyst’s eyes, “Based on our analysis and iPhone 7/7 Plus teardown reports, we believe Skyworks increased its dollar content in the recently launched iPhone 7/7 Plus smartphones versus the iPhone 6S/6S Plus models. Following Samsung’s Galaxy Note 7 challenges, we believe iPhone 7 is well positioned for the holiday season to gain market share, benefiting Skyworks with its strong RF $-content.”

“We believe Skyworks’ broad portfolio of custom integrated solutions should enable dollar content share growth in Apple’s and Samsung’s 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 double-digit annual growth driven by content share in markets such as 802.11ac, automotive, and the IoT markets,” Walkley concludes.

Moving forward, the analyst anticipates the giant will go back to year-over-year sales growth come 2017.

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, top five-star analyst Michael Walkley has achieved a high ranking of #29 out of 4,197 analysts. Walkley upholds a 60% success rate and realizes 14.4% in his yearly returns. When recommending SWKS, Walkley earns 35.4% in average profits on the stock.

TipRanks analytics exhibit SWKS as a Strong Buy. Based on 9 analysts polled in the last 3 months, 7 rate a Buy on SWKS, while 2 maintain a Hold. The consensus price target stands at $92.00, marking a nearly 18% upside from where the shares last closed.

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