Qorvo (QRVO) PT Lowered to $80 at Ascendiant Capital Amid Lower Guidance
Ascendiant Capital analyst Cody Acree lowered his price target on Qorvo Inc (NASDAQ: QRVO) to $80.00 (from $90.00) following the guidance miss but maintained a Buy rating on the stock.
Acree commented, "Echoing first half Chinese handset softness that’s led to a “few weeks” of excess inventory and a continued pause in 4G base station deployments, QRVO finally succumbed to these same factors impacting many component vendors this earnings season. After a very strong Chinese June quarter build, QRVO is seeing customers digest inventory, likely caused by the highly volatile market share shifts among the regions OEMs."
He added, "These factors led to a lighter than expected guidance that has QRVO’s shares down significantly after hours. With the majority of chip companies issuing at least cautious, if not clearly disappointing guidance, we understand investors’ recent departure from the space. However, QRVO’s shares have already pulled-back significantly, and even with our well below consensus estimates and its higher closing share price, the company is trading at a significant discount to its peers on most all metrics (see valuation section). With QRVO’s likely share gains and steadily growing margin leverage, we see any further pull-back as a significant buying opportunity and therefore maintain our Buy rating. We are lowering our target price to $80 from $90, to reflect the firm’s softer near-term outlook and a contraction of multiples throughout the chip space."
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Shares of Qorvo Inc closed at $70.47 yesterday.