BofA Downgrades Qorvo On Decelerating Demand

Qorvo Inc’s (NASDAQ: QRVO) sales growth is likely to decelerate from an estimated 22% in 2021 to 11% in 2022 and further down to 5% in 2023, according to BofA Securities.

The company issued third-quarter EPS and sales guidance Wednesday that were below Street estimates. 

The Qorvo Analyst: Vivek Arya downgraded Qorvo from Buy to Neutral and reduced the price target from $225 to $190.

The Qorvo Takeaways: Although the company’s execution has been good amid a challenging supply environment and it is diversifying away from smartphones, its growth trajectory is likely to be muted in the near to medium term, Arya said in the downgrade note.

“All-in, we believe 5G smartphone adoption will likely get down to more normalized levels in the next two years, which coupled with rising competition could limit growth reacceleration,” he wrote.

The analyst reduced the earnings estimates for 2022 and 2023 by 1% to $13.14 per share and by 3% to $14.04 per share, respectively.

QRVO Price Action: Shares of Qorvo were down 13.21% at $154.60 Thursday morning.