Brean Capital Raises Price Target on Qorvo (QRVO) to $62 Following 4Q Beat
Brean Capital reiterated a Buy rating on Qorvo Inc (NASDAQ: QRVO), and raised the price target to $62.00 (from $55.00), following the company's 4Q earnings report. QRVO reported revenue and EPS of $608M/$1.04 vs. Street at $599M/$0.92. Revenue only declined 2% Q/Q and was better than normal seasonal patterns. For the JunQ, the company expects revenue to grow 7% Q/Q to $650M vs. Street at $626M. For gross margins, the company is expecting flat trends and this should result in EPS of $1.05 vs. Street at $0.96.
Analyst Mike Burton commented, "Qorvo reported March 2016 quarter that beat Street EPS estimates by 13% and guided revenue and EPS above Street estimates for the June 2016 quarter. QRVO’s upside was attributed to strong revenue growth in (1) China, (2) content gains at Samsung and Huawei, and (3) a resumption of growth in its Infrastructure & Defense Products segment. These three positive dynamics drove better-than-seasonal revenue patterns (albeit off a terrible Dec-Q) as the top line only declined 2% Q/Q and is a far better revenue trend than most of QRVO’s peers that have exposure to smartphones in general. On the gross margin side, the Company was able to achieve its 50.0% target, but is guiding GMs flat in the June quarter. Looking forward, we see content gains and improved TAM for RF ICs as a driver for revenue growth and for GMs we see improvement stemming from cost synergies taking place in the 2H of 2016. Netting out the MarQ and guide, we are adjusting our CY16 estimates up by $0.25, or 6%, and we are reiterating our Buy rating on shares of QRVO and raising our TP to $62 from $55."
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Shares of Qorvo Inc closed at $44.51 yesterday.