Skyworks tumbles 10% as Q3 guidance falls short; BMO moves to sidelines

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Skyworks Solutions is down 10% in pre-market Tuesday following the report.

Skyworks Solutions reported Q2 EPS of $2.02 on revenue of $1.15 billion, in line with Wall Street estimates.

For the third fiscal quarter of 2023, revenue was to be between $1.05B and $1.090B with adjusted diluted earnings per share of $1.67. That compared with Wall Street estimates for EPS of $2.06 on revenue of $1.16B.

BMO analysts downgraded the stock to Market Perform as they see more questions than answers following the Q2 earnings report. The price target goes to $100 per share from $140.

“As a rule of thumb, we are loath to changing ratings after the fact. The exception to that is when we either cannot add it all up, if we see a structural issue emerging, or if we see a multi-quarter headwind. In this case we see some combination of the above. Thus, we would rather stay on the sidelines,” analysts said in a note.

Stifel analysts lowered the target to $130 per share on the Buy-rated SWKS stock as they continue to see a “compelling” valuation.

“We would note that SWKS expects to manage its business through the challenging fiscal year with expectations for FCF margin to remain well above its 30% longer-term target. While our estimates are lowered, we continue to view SWKS shares as attractively valued,” analysts wrote.

Additional reporting by Senad Karaahmetovic