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Investing.com - CFRA has initiated coverage on Skyworks Solutions (NASDAQ:SWKS) with a Sell rating and a $61.00 price target, citing concerns about the company’s heavy reliance on Apple (NASDAQ:AAPL) and competitive pressures in the radio frequency (RF) semiconductor market. The stock, currently trading at $67.17, has declined over 22% year-to-date and 29% over the past year. According to InvestingPro analysis, Skyworks maintains a "GOOD" overall Financial Health score, though analysts anticipate sales decline in the current year.
The research firm’s price target represents a 12.2x price-to-earnings multiple on calendar year 2027 earnings per share estimate of $5.02, which is below the company’s three-year and 10-year historical forward averages of 12.8x and 14x, respectively.
CFRA raised its fiscal year 2025 earnings per share estimate to $5.56 from $4.95 and its fiscal year 2026 forecast to $4.22 from $4.08, following Skyworks’ better-than-expected June quarter results, while initiating a fiscal year 2027 estimate of $4.97.
Despite acknowledging positive momentum in Skyworks’ non-mobile markets and cost discipline efforts, CFRA expressed concern about the company losing approximately 15%-20% content from Apple in the upcoming iPhone 17 cycle, noting that Apple represents over 60% of Skyworks’ sales.
The research firm indicated it sees better investment opportunities in semiconductor companies exposed to AI infrastructure build-out and those with greater content-per-device growth potential in non-AI markets, adding that while Skyworks might return to growth by fiscal year 2027, this timeline represents a "long time horizon for investors and comes with no real certainty given rising competitive pressures across the RF space."
In other recent news, Skyworks Solutions reported strong financial results for the third quarter of fiscal year 2025, surpassing both earnings and revenue forecasts. The company’s earnings per share reached $1.33, exceeding the forecast of $1.24, with revenue coming in at $965 million, above the anticipated $940.85 million. Additionally, Skyworks provided guidance for the September quarter with revenue expectations of $1.02 billion, surpassing consensus estimates of $883 million. In response to these developments, Mizuho (NYSE:MFG) has lowered its price target for Skyworks Solutions to $70 from $75, citing iPhone content headwinds but maintaining a Neutral rating. Similarly, Morgan Stanley (NYSE:MS) adjusted its price target for the company to $65 from $68, keeping an Equalweight rating. The firm noted that the smartphone supply chain has performed better than expected, driven partly by real demand strength. These recent developments highlight ongoing analyst evaluations and adjustments in response to Skyworks Solutions’ performance and market conditions.
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