Shares of Skyworks Solutions Inc (NASDAQ: SWKS) are down 5.0% this morning after the chipmaker disappointed in terms of guidance for its current financial quarter.
BMO downgraded Skyworks stock today
The semiconductor stock is weighed also because a BMO Capital Markets analyst downgraded it to “market perform” on Tuesday.
Ambrish Srivastava turned dovish as he expects the company’s margins to remain under pressure for a few quarter at least.
We can live with lower top-line in a choppy market. But it’s the multi-quarter headwind to [gross margins] that we’re uncomfortable with, combined with very high inventory on its balance sheet.
In Q2, though, the Nasdaq-listed firm matched Street estimates, as per its press release last night. Skyworks stock is now down nearly 20% versus its year-to-date high.
Skyworks shares lack meaningful upside
Srivastava also lowered his price objective on the semiconductor stock today to $100. That’s roughly in line with where it’s trading at writing.
His downgrade was based also on a slow recovery in China that’s contributing to worsening the inventory side of the equation. The BMO analyst said in his note:
[This] brings up the question of whether it’s seeing something structurally different, whether it has to do with issues ranging from more competitive pricing, share shifts, or not having the right product mix.
He’s not the only who turned negative following the quarterly update last night. JPMorgan analyst Harlan Sur also had a similar view on Skyworks stock in his report on Tuesday.
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