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Investing.com - Mizuho has upgraded Skyworks Solutions (NASDAQ:SWKS) from Underperform to Neutral and raised its price target to $73.00 from $65.00 on Monday. The upgrade comes as merger partner Qorvo (NASDAQ:QRVO) shows strong financial momentum, with InvestingPro data showing 13 analysts have recently revised their earnings upwards for the upcoming period.
The upgrade comes as Mizuho evaluates the impact of Skyworks’ pending merger with Qorvo, which is expected to create the largest global RF player with over 25% market share, surpassing Qualcomm. The deal is anticipated to generate approximately $500 million in annual synergies, though these benefits won’t be fully realized until 24-36 months after the expected April 2027 closing. Qorvo currently trades at $86.92, with a YTD price return of 22.84% despite experiencing a significant 8.21% decline over the past week.
Mizuho’s analysis projects Skyworks’ proforma FY27 earnings per share at $5.83, which at approximately 14x two-year forward P/E ratio implies a fair value of about $82 per share by FY27. The $73 price target represents this value discounted back to FY26 using an 11% equity discount rate. Meanwhile, InvestingPro analysis indicates Qorvo is currently undervalued with analyst targets ranging from $75 to $128, and its EPS forecast for FY2026 stands at $6.46. Discover comprehensive valuation metrics and 10+ additional ProTips with a subscription.
The firm identifies several challenges facing Skyworks, including significant customer concentration with 50-60% exposure to Apple, competition from domestic RF manufacturers in China, and projections that iPhone sales could decline approximately 7% year-over-year in calendar year 2026.
While the merger offers scale advantages and long-term synergies, Mizuho notes that handset growth and pricing challenges persist in the near term, though these are partially offset by some positive developments in the analog segment.
In other recent news, Qorvo Inc . reported its fiscal second-quarter 2026 earnings, surpassing earnings per share (EPS) expectations with an EPS of $2.22, which was higher than the forecasted $2.03. However, the company’s revenue of $1.059 billion fell short of the anticipated $1.03 billion. Despite the revenue miss, Qorvo’s results exceeded consensus estimates, with a reported adjusted gross margin of 49.7% against an expected 48.8%. In light of these results, Stifel has maintained its Hold rating on Qorvo, setting a price target of $88.00. Meanwhile, JPMorgan upgraded Qorvo from Underweight to Neutral, raising its price target to $105.00, citing positive trends in the company’s iPhone business. Qorvo is experiencing over 10% content growth in the iPhone 17, benefiting from gains across all major product categories. These developments highlight a mixed but promising outlook for Qorvo, as it navigates both challenges and opportunities in its market segments.
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