Key insights
- Barclays upgraded Skyworks Solutions (SWKS) to Overweight, citing a likely delay in Apple's low-end iPhone launch, pushing units into 2027. This impacts Skyworks due to its heavy reliance on lower-end phone components. Despite near-term challenges and concerns about long-term share loss, Barclays sees value in RF names like Skyworks, especially as Apple moves towards internal modems. The stock appears undervalued with strong free cash flow and dividend yields.
Investing.com - Barclays upgraded Skyworks Solutions (NASDAQ:SWKS) to Overweight from Equalweight on Wednesday and raised its price target to $70 from $60. The stock currently trades at $59.94 with a market cap of $9.02 billion and a P/E ratio of 22.88.
The upgrade reflects Barclays’ view that Apple will delay the launch timing of its low-end phones. The firm said it has grown more confident in this assessment as 2026 has progressed.
Barclays analyst Tom O’Malley said the delay pushes lower-end iPhone units into 2027 from 2026, creating challenges for the Apple ecosystem and particularly for Skyworks. He noted that units will be materially lower for what is normally a seasonally strong September and December period.
Skyworks’ content is heavily weighted toward lower-end phones that are being pushed out, which further compounds the issue, O’Malley said. He added that Skyworks is pointing to flat content generation-on-generation and is defending share in larger sockets for now. The company’s recent revenue growth of 0.22% reflects these challenges, though an InvestingPro tip notes that 20 analysts have revised their earnings upwards for the upcoming period.
O’Malley said concerns exist about continued long-term share loss but expects more positives than negatives as Apple moves toward more internal modems and approaches the anniversary phone. He acknowledged the upgrade timing may be early but sees value in RF names. According to InvestingPro analysis, the stock appears undervalued with a strong free cash flow yield of 12% and a dividend yield of 4.74%. For deeper insights, investors can access the comprehensive Pro Research Report, available for SWKS and 1,400+ other US stocks.
In other recent news, Skyworks Solutions reported impressive financial results for the first quarter of fiscal year 2026. The company exceeded earnings expectations with an adjusted earnings per share (EPS) of $1.54, compared to the forecasted $1.40, and achieved revenue of $1.04 billion, surpassing the $1 billion estimate. Despite these strong results, Skyworks is facing some challenges. Mizuho downgraded the company’s stock rating from Neutral to Underperform due to concerns in the handset industry, which accounts for a significant portion of Skyworks’ revenue. Additionally, Stifel and KeyBanc lowered their price targets for Skyworks, citing uncertainties around mergers and iPhone content outlook, respectively. Stifel maintained a Hold rating, while KeyBanc kept an Overweight rating. Meanwhile, Benchmark reiterated its Hold rating, noting improved content positioning in upcoming Apple and Android devices. These developments highlight a mixed sentiment among analysts regarding Skyworks’ future prospects.
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