Qorvo ( NASDAQ: QRVO ) shares slipped on Monday as investment firm Cowen downgraded the semiconductor maker, noting weakness in Android smartphones that are likely to weigh on revenue, margins and sentiment.
Analyst Matthew Ramsay moved the firm's rating on Qorvo ( QRVO ) shares to market perform and cut the price target to $108 from $150, noting the company has been slow to diversify itself. And with a challenging environment for mobile, at least in the near-term, it's "tough for RF technology and valuation alone to support an Outperform rating."
Ramsay lowered his revenue and earnings per share estimates for fiscal 2023 to $4.2B and $9.22 per share, down frm $4.35B and $9.62. He also cut estimates for fiscal 2024, moving to $4.8B and $12 per share, down from a prior estimate of $5B and $12.50 per share.
Qorvo ( QRVO ) shares fell slightly more than 1% to $97.74 in mid-day trading.
Despite the downgrade, Ramsay noted that Qorvo ( QRVO ) is likely to keep benefiting in the long-term, citing continued expansion of RF content, not just in 5G, but other technologies, such as Wi-Fi 6/6E, Matter and other wireless protocols.
"This likely allows Qorvo to return to [year-over-year] growth in [fiscal 2024]," Ramsay added.
Last month, Morgan Stanley listed Qorvo ( QRVO ) as one of the companies with the most revenue exposure to China, in light of the country's ongoing lockdowns as a result of the COVID-19 pandemic .
Analysts have been somewhat positive on Qorvo ( QRVO ). It had an average rating of BUY from Wall Street analysts , while Seeking Alpha authors are less positive on it and rate it a HOLD . Conversely, Seeking Alpha's quant system, which consistently beats the market, rates QRVO a HOLD .
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Qorvo slips as Cowen downgrades, citing weakness in Android handsets