Barclays Turns Bullish On Qorvo, Projects Larger Apple Relationship

Qorvo Inc (NASDAQ: QRVO) is likely to gain some bulk acoustic wave share at Apple Inc. (NASDAQ: AAPL), with more likely in 2019, Barclays said in an upgrade note. 

BAWs are filters used to solve interference and co-existence challenges that are used in smartphones, base stations, repeaters, Wi-Fi applications and more. 

The Analyst

Barclays analyst Blayne Curtis upgraded Qorvo from Equal-weight to Overweight with an $87 price target. 

The Thesis

Risk exists for Qorvo's June quarter guidance in light of Apple's iPhone shipment weakness, Curtis said in a Tuesday note. Investors will soon begin to focus on the second half, as both Apple and Samsung Electronics Co Ltd (OTC: SSNLF) could drive revenue and gross margins, the analyst said. 

"We believe both QRVO and Skyworks Solutions Inc (NASDAQ: SWKS) can work given double-digit content gains this year." 

Barclays' June quarter expectations of $666 million in revenue and EPS of $1.02 are below consensus expectations and call for a sequential drop.

Qorvo is likely to pick up some share at the expense of Broadcom Inc (NASDAQ: AVGO), both in the LCD models of iPhones and at Samsung, where it consolidated the mid-to-high packet assembler/disassembler share, Curtis said.

Barclays forecast a 24-percent increase in Qorvo's blended component content at Apple.

The Price Action

Qorvo shares were rallying 6.5 percent to $71.79 at the time of publication Tuesday. 

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Photo courtesy of Apple.