B. Riley Trims Skyworks Price Target Amid Persistent Android Market Headwinds
Skyworks Solutions (NASDAQ: SWKS), a notable name among high-yield dividend stocks with sustainable payouts, faced a tempered outlook from Wall Street this week. Analyst Craig Ellis of B. Riley Securities revised his price target downward to $60 from $70, while maintaining a Neutral rating on the semiconductor firm.
In a research note, Ellis indicated that while Skyworks' fourth-quarter results are likely to edge past consensus estimates—bolstered in part by the upcoming iPhone 17 cycle—the company's first-quarter guidance is projected to align with subdued expectations. This caution primarily reflects "weaker conditions in the Android business," a segment that continues to grapple with inventory corrections and muted consumer demand.
The adjustment marks a shift from the more optimistic tone struck by Skyworks just months prior. In November, the company had forecast Q1 revenue and profit above Wall Street estimates, driven by robust demand for its radio-frequency (RF) chips in Apple's latest 5G iPhones. The rapid global rollout of 5G devices and the early integration of AI capabilities have historically provided tailwinds for Skyworks, a key supplier in the RF front-end market.
Beyond its core smartphone business, Skyworks has seen accelerating growth in its broad markets segment, which supplies chips for automotive, industrial, and Internet of Things (IoT) applications. Industry trends such as the adoption of WiFi 7, the rise of connected vehicles, and AI-driven hardware upgrades are creating new demand channels, helping to diversify the company's revenue streams.
In a significant strategic move last October, Skyworks announced a cash-and-stock offer to acquire rival Qorvo in a deal valued at approximately $22 billion. The merger, which values Qorvo at around $9.76 billion, would create a RF chip powerhouse with combined scale and deeper relationships with key customers like Apple. Both companies are major suppliers of components that manage wireless signals in smartphones and other devices.
Analysts suggest that while the Android weakness presents a near-term challenge, Skyworks' long-term positioning remains intact, supported by its Apple partnership, diversification strategy, and the pending Qorvo acquisition. The company's reliable dividend payout also continues to attract income-focused investors.
Market Voices:
"This target cut is a reality check," says Michael Torres, a portfolio manager at Horizon Capital. "The Android overhang isn't new, but it's proving more persistent than some hoped. The Qorvo deal can't close soon enough to diversify that exposure."
"It's frustrating to see a company with such strong tech get dragged down by one segment," comments Sarah Chen, an independent tech analyst. "Their automotive and IoT growth is impressive and frankly being overlooked. The market is myopically focused on smartphones."
"Another quarter, another excuse about Android," retorts David Klein, a frequent market commentator known for his blunt takes. "Management's 'diversification' story is moving at a glacial pace. They're still overwhelmingly tied to Apple's coattails and a crumbling Android market. That dividend might be the only thing holding the stock up right now."
"The revised target seems measured," adds Priya Sharma, a senior equity research associate. "Ellis isn't panicking. He's acknowledging the cyclical headwind while recognizing the structural strengths—the Apple relationship, the Qorvo synergy potential, and the non-mobile growth. It's a 'hold' until visibility improves."