Recently, KeyBanc downgraded shares of semiconductor firm Skyworks Solutions (SWKS) from “Overweight” to “Sector Weight.” Analyst Jon Vinh said that the reasoning behind the firm's prior upgrade for SWKS stock no longer holds, forcing a reversion of the initial rating.
Skyworks originally received an upgrade after announcing plans to merge with Qorvo (QRVO), creating a $22 billion company set to be a global leader in high-performance radio frequency (RF), analog, and mixed-signal semiconductors. Skyworks and Qorvo now expect to complete the acquisition this year, which is sooner than previously anticipated.
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KeyBanc believes that the initial conditions of the pending acquisition, which was expected to create more than $500 million in cost synergies and improve the competitive position for Apple (AAPL) sockets, are no longer valid. The reason for this is the memory crunch, which has severely affected the smartphone market on which Skyworks and Qorvo depend. KeyBanc expects memory shortages throughout 2027 and perhaps even in 2028. Seeing minimal catalysts, the firm believes Skyworks might find it hard to work amid these market conditions.
About Skyworks Stock
Skyworks Solutions is a semiconductor company that develops analog and mixed-signal solutions for wireless connectivity. Its products support smartphones, broadband, automotive, industrial, and other connected applications by improving signal transmission, power efficiency, and radio performance.
The company focuses on highly integrated components and modules that help devices communicate reliably across modern networks. Skyworks is headquartered in Irvine, California, and has a market capitalization of $8.6 billion. The firm has also been expanding into artificial intelligence (AI), electric vehicle (EV), and next-gen wireless solutions, while moving ahead with merger-related steps involving Qorvo.
SWKS stock has been weak over the past year, mainly because investors are worried about slowing demand in the smartphone business, especially at Apple, which is a major customer for the company. Moreover, pressure is coming from concerns about competition in RF solutions. Over the past 52 weeks, SWKS stock has dropped 22%. Shares are also down 10% year-to-date (YTD). Just for comparison, the S&P Semiconductor SPDR ETF (XSD) is up about 90% and 57% over the same periods, respectively. SWKS stock reached a 52-week low of $51.93 on March 30, but shares are currently up 10% from that level.
www.barchart.com The selloff has made Skyworks’ valuation more reasonable, however. Its forward price-to-earnings (P/E) ratio of 15.6 times is lower than the industry average of roughly 25 times.
Skyworks Reported Better Than Expected Q2 Earnings
Continued pressure in the mobile industry has affected Skyworks’ financials, although the most recent quarter came in better than anticipated. In the second quarter of fiscal 2026, revenue dropped modestly year-over-year (YOY) to $943.7 million but topped the $900.1 million expected by Wall Street analysts. Non-GAAP EPS dropped from $1.24 to $1.15 over the same period but also surpassed the Street's estimate of $1.04 per share.
With the Mobile segment following seasonal patterns, Skyworks expects Q3 revenue of $900 million to $950 million, with non-GAAP EPS of $1.03 based on the midpoint of the revenue range.
Wall Street analysts are tepid about future earnings. Analysts expect EPS to decline 38% YOY to $0.64 in Q3. For fiscal 2026, EPS is projected to drop 21% to $3.61, followed by a 1% decrease to $3.58 in fiscal 2027.
What Do Analysts Think About Skyworks Stock?
In addition to KeyBanc having a measured opinion on SWKS stock, other analysts are showing similar sentiments. In June, RBC Capital maintained a “Sector Perform” rating on the stock but raised the price target from $72 to $80. At recent investor meetings, CEO Philip Brace and Vice President of Investor Relations Raji Gill did not offer near-term guidance, but RBC thinks that conditions look stable and expects normal seasonal patterns. Management also suggested that mobile content pressure may be easing, while longer-term RF opportunities could grow. In May, UBS analyst Timothy Arcuri kept a “Neutral” rating as well, while raising the price target from $63 to $75.
Wall Street is now taking a cautious stance on Skyworks stock with a consensus “Hold” rating. Of the 24 analysts with coverage, three analysts have a “Strong Buy” rating, 19 analysts have a “Hold” rating, one suggests a “Moderate Sell,” and one has a “Strong Sell” rating. The mean price target of $75.59 represents 33% potential upside from current levels, while the Street-high price target of $106 implies a possible 86% rise from here.
www.barchart.com On the date of publication, Anushka Dutta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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