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Apple ‘s ( AAPL ) iPhone drag will seize another victim Wednesday, a Goldman Sachs analyst suggested Tuesday, ahead of Qorvo ‘s ( QRVO ) quarterly earnings report, with Wall Street forecasting the chipmaker’s first year-over-year sales decline in eight quarters. But the Apple trough will likely resolve in the second half of the year, when the iPhone 7 ramps, Goldman Sachs analyst Toshiya Hari wrote in a research report. He expects radio-frequency chip rivals Qorvo, Broadcom ( AVGO ) and Skyworks Solutions ( SWKS ) to see growth from the release of the iPhone 7, expected in September. “While unit headwinds and inventory burn at Apple could weigh on results, we believe we are at the trough of the cycle and expect RF fundamental to improve,” Hari wrote. “The RF content growth story is still fully intact.” First, though, heavily-Apple-exposed Qorvo has to survive the March quarter, for which Apple reported its first-ever year-over-year decline in smartphone sales. For Qorvo’s fiscal Q4, the consensus of 20 analysts polled by Thomson Reuters models $599.2 million in sales and 92 cents earnings per share minus items, down a respective 6% and 17% vs. the year-earlier quarter. Qorvo reports after the close Wednesday. Three months ago, Qorvo guided to $600 million in sales and 90-95 cents EPS ex items. Qorvo’s sales and EPS have decelerated for the past three and four quarters, respectively. Last quarter, EPS fell for the first time since September 2012. For the fiscal year, Qorvo is expected to report 52% sales growth, to $2.6 billion. But analyst consensus calls for a 10% decline in EPS ex items, to $4.26. In the stock market today , Qorvo stock rose a fraction to 45.04, while Broadcom fell 2% and Skyworks fell a fraction. Last week, Skyworks’ fiscal Q2 metrics topped analysts’ consensus, but Q3 guidance missed. Then, Skyworks stock dropped 6.9%. Hari says Qorvo stock could experience a similar dip. But Qorvo shares are already down 12% over the past 12 months, and “weakness may not be as pronounced,” he wrote. Hari cut his price target on Qorvo stock to 44 from 47 but kept his neutral rating. He trimmed his Broadcom stock price target to 171 from 175, but he still rates it and Skyworks both a buy. Among the three, Qorvo is the most Apple-exposed, Hari wrote. “We expect investors to focus on its (fiscal Q1) guide (impact of Apple fallout) and execution (share gains at Samsung),” he wrote. Scalper1 News
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