Credit: Shutterstock photoSuppliers of radio-frequency chips for Apple ( AAPL ) iPhones will see their shares under pressure as iPhone X sales expectations start to come down, a Wall Street analyst said Thursday.
[ibd-display-video id=3023531 width=50 float=left autostart=true] "We remain favorably disposed toward RF (radio frequency) suppliers in 2018 as estimates do not incorporate an iPhone 'supercycle,' but we see stocks languishing near term until we see a wave of estimate cuts for iPhone-related revenue in calendar Q1," Cowen analyst Karl Ackerman said in a note to clients.
Ackerman lowered his sales and earnings estimates for Broadcom ( AVGO ), Qorvo ( QRVO ) and Skyworks Solutions ( SWKS ). He also cut his price targets on those stocks.
Ackerman also reiterated his outperform rating on Broadcom, but lowered his price target to 315 from 320. While maintaining market perform ratings on Qorvo and Skyworks, he cut his price target on Qorvo to 78 from 80 and on Skyworks to 115 from 120.
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On the stock market today , Broadcom was down 1% to close at 259.34; Qorvo dropped 3.1% to finish at 65.23; and Skyworks was down 1.9%, to 94.09.
Improvements in iPhone X availability lately are as much a factor of weaker-than-expected demand as improved production and supply, Ackerman said.
"Lead times have narrowed considerably to a few days vs. initial quotes of 5-6 weeks at time of launch," he said. "Some investors may conclude this relates to better sales momentum for the X, but we are increasingly concerned that demand has been below initial expectations as users appear to have gravitated toward previous iPhone models."
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
