Analyst Vivek Arya of Bank of America Securities reiterated a Sell rating on Skyworks Solutions (SWKS – Research Report), reducing the price target to $60.00.
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Vivek Arya has given his Sell rating due to a combination of factors impacting Skyworks Solutions. A significant issue is the anticipated 20-25% loss of content in the upcoming Fall 2026 iPhone, which constitutes a major part of Skyworks’ business, as Apple is its largest customer, accounting for 72% of sales. This content loss, specifically in the Diversity Receive modules, is expected to be shared with Broadcom, and there is uncertainty about Skyworks regaining this business even in the following fiscal year. The situation is exacerbated by the reduction in projected earnings per share and the lowered price objective due to these challenges.
Despite Skyworks’ strong free cash flow generation and stable gross margins, the company faces tough competition and operational expenses challenges. The competition from companies like Qorvo, Qualcomm, and Broadcom is intensifying, particularly as Skyworks aims to reclaim lost business with Apple. This competitive pressure, combined with high operational costs and low utilization rates, further contributes to the Sell rating, highlighting the risks associated with customer concentration and the company’s current market position.