Goldman Sachs analyst Toshiya Hari believes that mobile device radio frequency solutions provider Qorvo (QRVO) - Get Qorvo Inc. Report is a turnaround story, upgrading the company's rating to buy from neutral.
Hari is bullish on the company because of changing sentiment about the smartphone market, which he said is showing signs of stabilization as the near-term upside in China is likely to offset weakness at Apple (AAPL) - Get Apple Inc. Report .
Hari also raised the company's price target to $79 per share from $66, representing a 14.2% upside from the stock's previous closing price. Qorvo was rising nearly 6% to $73.11 in trading Thursday.
Qorvo recently provided guidance for a 47% non-GAAP gross margin for the current quarter, which is 170 points below consensus. Hari sees a margin expansion opportunity in the numbers, predicting an expansion over the next one to two years
Goldman's rating on the stock is above the Wall Street consensus, with 58% of Qorvo analysts with neutral ratings and 4% with sell ratings.
Qorvo ran into trouble at the end of 2018 after the Apple supplier slashed its third-quarter forecast after the iPhone maker warned that holiday season sales would miss Wall Street expectations.
Year to date, Qorvo's stock has risen more than 20%.
Apple is a holding in Jim Cramer's Action Alerts PLUS charitable trust.
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