Skyworks downgraded to Hold at Benchmark on Apple weakness and share loss

Benchmark downgraded Skyworks (SWKS) to Hold from Buy and removed the firm’s prior price target after the company posted March quarter revenue that matched the Street consensus, but excess market inventories and soft consumer smartphone activity weighed on the company’s guidance for the June quarter. Skyworks is likely in the process of seeing its end-market demand bottoming, while its market share position looks positive at most of the leading Android players, but the firm is concerned by the company’s loss of about 10% net market share at its largest customer, Apple (AAPL), in its next generation smartphone that is expected to be announced this September, the analyst tells investors. When softer first half market demand is paired with the expected share loss at Apple in the second half, the firm’s model suggests an annual revenue decline of about 13.6% in FY24 and then as the iPhone 16 accounts for the bulk of Apple’s expected volumes in FY25, the firm looks for Skyworks’ sales to be about flat year-over-year, the analyst noted.