Skyworks shares hold as Apple content cuts loom

On Thursday, Needham maintained a Hold rating on Skyworks Solutions (NASDAQ:SWKS) shares following the company’s recent earnings report. The $13.9 billion market cap company, currently trading near its 52-week low, faces significant upcoming changes, particularly regarding its business with Apple (NASDAQ:AAPL). According to InvestingPro data, Skyworks maintains strong financial health with a current ratio of 5.54. However, Skyworks Solutions confirmed that its content in the next-generation iPhone 17 will be substantially reduced as Apple moves to dual-source a key component. This development is expected to decrease Skyworks’ content by approximately 20-25% through the fiscal year 2026, potentially reducing Mobile revenue by over $380 million year-over-year.

Despite this setback, Skyworks Solutions is committed to investing in its operations with its lead customer, planning to increase operating expenses materially through FY26. While revenue declined 12.45% in the last twelve months, the company’s Broad Markets segment is showing signs of growth, with expectations for a moderate acceleration throughout FY26.

In a leadership transition, CEO Liam Griffin is set to step down and will be succeeded by Philip Brace, a seasoned industry veteran. Moreover, Skyworks’ Board of Directors has authorized a new share repurchase agreement, allowing for the buyback of up to approximately $2 billion worth of shares through February 3, 2027.

Needham’s analysts have significantly reset their estimates for Skyworks Solutions in light of these developments. They have reiterated their Hold rating on the stock, indicating a cautious stance until further details emerge about Apple’s shift towards an internal modem and its broader impact on Skyworks.

In other recent news, Skyworks Solutions has been the subject of multiple analyst adjustments following a series of significant developments. Goldman Sachs revised the company’s price target to $70, maintaining a neutral rating, due to a significant reduction in RF dollar content in the flagship phone from its primary customer. This led to a revision of non-GAAP EPS estimates for Skyworks Solutions for the fiscal years 2025-2027, reducing them on average by 30%.

Citi analysts, despite lowering their price target for Skyworks Solutions to $118, maintained a buy rating on the stock. The adjustment was made following the company’s fourth-quarter 2024 results, which slightly surpassed expectations, although the EPS guidance fell short of consensus estimates. Despite the decrease, Citi analysts believe Skyworks Solutions presents a compelling buy opportunity.

B.Riley analysts downgraded Skyworks Solutions stock from Buy to Neutral, slashing the price target to $65. This followed the company’s announcement of a significant share loss at its largest customer, Apple, and the unexpected departure of CEO Liam Griffin. B.Riley reduced its earnings per share estimates for fiscal years 2025 and 2026 by 10% and 32%, respectively.

Stifel analysts downgraded Skyworks Solutions from ’Buy’ to ’Hold’, reducing the price target to $62. This adjustment was a response to Skyworks Solutions losing additional content at its largest customer, Apple, which is expected to lead to a 20-25% content reduction in the upcoming iPhone 17 product set.

Lastly, Mizuho (NYSE:MFG) Securities downgraded Skyworks Solutions from Outperform to Neutral, with a significant cut in the price target to $62. This was due to the anticipated loss of approximately 20-25% of its content in the upcoming iPhone17 and the retirement announcement of Skyworks’ CEO.

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