Piper Sandler raises Qorvo stock rating to Overweight

On Monday, Piper Sandler adjusted its stance on Qorvo Inc (NASDAQ:QRVO), elevating the stock from a Neutral rating to Overweight. Accompanying this upgrade, the firm also increased its price target for Qorvo shares to $110.00, up from the previous target of $85.00. According to InvestingPro data, the stock has shown strong momentum with a 27% return year-to-date, despite facing challenges in recent months.

The upgrade by Piper Sandler comes in light of the potential for improved fundamentals at Qorvo, spurred by the involvement of the activist investor Starboard. Analysts at Piper Sandler believe that Qorvo's current situation is ideally suited for the activist to implement operational and capital efficiencies.

According to Piper Sandler, Starboard has a commendable history of effecting change in similar scenarios, focusing on areas such as operational expense efficiencies, capital footprint efficiencies, product pruning, and strategic divestitures. Piper Sandler estimates that Qorvo could realize operating efficiencies in the range of $250-$300 million if it were to adopt an operational expense structure comparable to its closest competitor, Skyworks Solutions (NASDAQ:SWKS).

The research firm also suggests that Starboard could potentially streamline Qorvo's plant footprint. Moreover, there is an expectation that Qorvo's analog business could fetch a higher valuation on the open market. The combination of these factors and Starboard's proven track record led to Piper Sandler's decision to upgrade Qorvo to Overweight and raise the price target.

The new price target of $110.00 reflects Piper Sandler's confidence in the value creation that could result from the activist's involvement. Piper Sandler's analysis points to a significant opportunity for Qorvo to enhance its operational efficiency and overall financial performance.

In other recent news, Qorvo has been the focus of several key developments. The company's Q2 2025 results showed revenues hitting $1,047 million, an 18% increase from the previous quarter, and non-GAAP diluted earnings per share (EPS) of $1.88 surpassing expectations. However, Qorvo forecasts a slight decline in revenue for fiscal 2025 due to shifts in the Android smartphone market.

In a strategic move, Qorvo divested its silicon carbide business to reallocate resources to strategic growth areas and reduce operating expenses. This decision aligns with the company's objective to focus on areas with a higher growth potential and profitability.

Financial services firms Mizuho (NYSE:MFG) Securities and Loop Capital have recently adjusted their stance on Qorvo. Mizuho raised Qorvo's stock price target to $90, maintaining a neutral rating, while Loop Capital initiated coverage on Qorvo, assigning a Hold rating and a price target of $73.00, indicating a complex environment for the company.

These recent developments reflect the ongoing adjustments and strategic decisions being made by Qorvo in response to market dynamics and financial performance.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.