Qorvo Rises as Analysts Lift Price Targets on Strong Earnings

Analysts see Qorvo benefiting from the switch to 5G technology.
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Qorvo (QRVO) - Get Report shares rose Thursday as analysts increased their target prices on the stock after the semiconductor company reported stronger-than-expected earnings.

For the fiscal third quarter ended Dec. 28, Qorvo reported adjusted earnings per share of $1.86, up from $1.85 a year earlier. Analysts had forecast earnings of $1.67 a share in the three-month period.

The company posted an adjusted gross margin of 49.3% in the third quarter, down from 49.5% a year earlier. Analysts had predicted 48% for the latest quarter.

Qorvo predicted adjusted earnings per share of $1.55 for the fourth quarter, compared to analysts’ projections of $1.14, and it anticipates revenue of $800 million to $840 million in the fourth quarter, compared to analysts’ expectation of $726.4 million.

As for the share-target price increases, Mizuho analysts lifted their target to $135 from $125, and Raymond James analyst Chris Caso boosted his target to $135 from $98, reiterating his outperform rating.

At last check, Qorvo shares were trading at $114.65, up 1.85%.

Caso called Qorvo's third-quarter performance “strong” and said the semiconductor company offered "much better" than seasonal guidance on the strength of its 5G business in China. The company’s earnings should continue to rise, boosted by high volume mobile phones switching to 5G technology, he said.

Bloomberg Intelligence took much the same stance. “The company's improved sales momentum is more than just the iPhone near term, as content increases with Samsung and Chinese vendor 5G launches fuel the strong revenue outlook,” Bloomberg Intelligence said in a report.