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Investing.com - CFRA has upgraded Skyworks Solutions (NASDAQ:SWKS) from Sell to Hold and raised its price target to $90.00 from $61.00, citing the company’s planned acquisition of Qorvo (NASDAQ:QRVO). According to InvestingPro data, Qorvo currently trades near its 52-week high of $105.39, having surged 44.4% over the past six months, with a market capitalization of $9.39 billion.
Skyworks plans to acquire Qorvo in a cash-and-stock deal where Qorvo investors will receive $32.50 in cash and 0.96 Skyworks shares for each Qorvo share. The transaction is expected to close in calendar year 2027 and has support from Starboard, which holds an 8% stake in Qorvo. InvestingPro analysis shows Qorvo maintains a strong financial position with a current ratio of 2.81 and an overall Financial Health score of "GOOD."
The deal is expected to be immediately accretive with $500 million in cost synergies anticipated within 24-36 months of closing. The combined entity would have pro forma revenue of $7.7 billion ($5.1 billion in Mobile and $2.6 billion in diversified Broad Markets) and adjusted EBITDA of $2.1 billion. Discover more detailed analysis and 12 additional exclusive insights about Qorvo with an InvestingPro subscription, including the comprehensive Pro Research Report.
CFRA raised its fiscal year 2025 EPS estimate to $5.93 from $5.56, fiscal year 2026 to $4.64 from $4.22, and fiscal year 2027 to $5.22 from $4.97. The new price target represents a 16.4x multiple on CFRA’s calendar year 2027 EPS view of $5.50.
Skyworks also released preliminary September quarter results, reporting revenue of $1.10 billion and non-GAAP EPS of $1.76, exceeding expectations of $1.0 billion and $1.41, respectively.
In other recent news, Skyworks Solutions and Qorvo have announced a merger in a cash-and-stock transaction valued at approximately $22 billion. This deal will see Qorvo shareholders receiving $32.50 in cash and 0.960 Skyworks shares for each Qorvo share, with Skyworks shareholders set to own about 63% of the combined company. Meanwhile, Qorvo reported its first-quarter fiscal year 2026 earnings, showing strong demand in the defense and aerospace sectors, with revenue reaching $819 million and non-GAAP diluted earnings of $0.92 per share. Despite these earnings, Mizuho has downgraded Qorvo from Neutral to Underperform, lowering its price target to $60 from $70 due to concerns over the company’s growth prospects. Mizuho anticipates Qorvo’s topline growth to be less than 3% annually through fiscal year 2028. The merger between Skyworks and Qorvo follows earlier reports that Skyworks had been in talks to acquire Qorvo. These developments highlight significant strategic movements in the semiconductor industry.
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