Chipmaker Skyworks Solutions (SWKS) received a bullish report Sunday from Canaccord Genuity analyst Michael Walkley, who expects the company to show improving sales and accelerating growth year over year through 2017.
Walkley reiterated his buy rating on Skyworks and raised his price target on the stock to 105 from 96.
Skyworks shares ended the regular trading session up 0.6% to 95.45 on the stock market today.
Skyworks stock broke out of a flat base with a buy point of 81.14 on Jan. 20 after the wireless chip company beat Wall Street expectations with its December-quarter results and current-quarter guidance.
IBD'S TAKE: Skyworks stock has an IBD Composite rating of 91, meaning it has outperformed 91% of stocks in key metrics over the past 12 months. But it ranks No. 8 out of 38 stocks in IBD's Electronics-Semiconductor Manufacturing industry group. To see which company leads the group, visit the IBD Stock Checkup.
"Skyworks is well positioned for strong trends throughout calendar 2017 driven by strong content share with leading Chinese smartphone (manufacturers) including Vivo, Oppo, Meizu, Xiaomi and Huawei," Walkley said.
Skyworks also is expected to increase its content share in Samsung smartphones in upcoming quarters, he said.
Plus, Skyworks is likely to benefit from the launch of Apple's (AAPL) iPhone 8 smartphone later this year, he said. Skyworks should at least maintain content share in the iPhone 8, Walkley said.
Skyworks is adding content share in smartphones as foreign carriers switch from 3G to 4G LTE radio-frequency networks, Walkley said.
"We anticipate strong dollar content increases with customers during 2017 and 2018 including Chinese (smartphone makers) and Samsung as Skyworks expands integrated offerings with Wi-Fi, power management, antenna tuning, receive/diversity, filters and integrated modules," Walkley said.
Meanwhile, Walkley on Sunday reiterated his buy rating on wireless communications chipmaker Qualcomm (QCOM) with a price target of 76.
He believes that Apple will stick with Qualcomm baseband modems for the iPhone 8, despite its ongoing lawsuits with Qualcomm over royalties and patent licensing.
"We believe Apple will continue to use Qualcomm modems in a large portion of future smartphones given Qualcomm's leadership position and strong research and development expenses to maintain its leadership position in future modem technologies," Walkley said in a report. "While Apple and Qualcomm are in an intense licensing dispute that could take a year or more to settle, we believe Apple will not risk its iPhone performance vs. leading Android smartphones and will continue to buy Qualcomm modems in the iPhone 8 and beyond."
However, Baird analyst Tristan Gerra believes Apple will shift more modem chip business to Intel (INTC).
"Intel is expected to reach 60-65% market share in the iPhone 8, up from 50% in the iPhone7," Gerra said in a report Monday.
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