Skyworks (SWKS) Stock Lower on Ratings Downgrade

Skyworks (SWKS) stock is declining this morning following a downgrade to 'sector weight' at Pacific Crest given slowing iPhone demand.
By Rachel Graf ,

NEW YORK (TheStreet) -- Shares of Skyworks Solutions (SWKS) - Get Report are falling 4.42% to $59.83 in early-morning trading on Tuesday after Pacific Crest cut its rating on shares to "sector weight" from "overweight" in a note released earlier today.

The firm removed its $90 price target on shares of the Woburn, MA-based semiconductor company.

The ratings downgrade reflects concerns about a 15% to 20% drop in iPhone 7 shipments in the second half of this year, Pacific Crest said.

An inventory correction at Huawei and share loss to Murata could further "mute estimates" in 2016, the firm mentioned. 

"While we do continue to believe the company stands to increase [radio frequency] content by 10% to 15% going forward, we don't think this will be enough to offset another disappointing iPhone cycle," Pacific Crest contended.

Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of B.

Skyworks' strengths such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

You can view the full analysis from the report here: SWKS

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author. 

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