Needham analyst Rajvindra Gill maintained Qorvo Inc. QRVO with a Buy and raised the price target from $105 to $130.
The gross margin deterioration of channel inventory is well below Gill's previous estimate, and weakness persists through F 1 H 24.
Management said that China's handset sales-through has been strong YTD, the first signs of a recovery in the analyst's view.
Gill's FY 24 estimates decreased significantly but became more confident of a trough. Content gains at the top customers ramp up as the model goes through underutilization and inventory dynamics.
The analyst believes that QRVO is a major beneficiary of the expected upgrade cycle at Apple Inc AAPL and Samsung Electronics Co, Ltd SSNLF with 5 G phones.
Gary Mobley, Wells Fargo analyst Gary Mobley maintained an Equal-Weight and raised the price target from $90 to $110.
The re-rating reflects better than exp 3 Q 22 results 4 Q 22 guide, indicative of inventory burn. The price target is a result of an adjustment for a higher comp group valuation and a higher est recovery scenario.
Mizuho analyst Vijay Rakesh maintained a Neutral and raised the price target from $93 to $100.
QRVO noted in March quarter challenges with RF inventory overhang, overall 2023 handset down Y Y, despite 5 G growth, some content and share gains in next-gen flagship models and underutilization charges impacting GM by 920 bps.
BMO Capital analyst Ambrish Srivastava maintained a Market Perform and raised the price target from $90 to $105. The channel seems to have excess Qorvo inventory.
It will likely normalize in China, where sales are well off the peak.
Component inventory is likely normalized, but it is not. Qorvo stated that it will take at least a quarter to normalize its component inventory in handsets until this CY. Susquehanna analyst Christopher Rolland maintained a Neutral and raised the price target from $95 to $100. Content gains at Apple and Samsung should help, as inventory dynamics weigh on Qorvo.
Price Action: The last check Thursday saw QRVO shares fall by 4.71% to $108.26.