Benchmark Says Buy These 2 Apple Suppliers

The brokerage firm set upside price targets for SWKS and ORVO stocks, too

Jun 15, 2018 at 12:55 PM
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Benchmark weighed on on several Apple suppliers, initiating new "buy" recommendations on Skyworks Solutions Inc (NASDAQ:SWKS) and Qorvo Inc (NASDAQ:QRVO). This comes as The Wall Street Journal reports Apple (AAPL) is planning to use cheaper liquid-crystal displays (LCD) in its next generation of iPhones to cut the cost of the devices.

Skyworks Solutions Stock Stuck Between Key Trendlines

Skyworks Solutions "has a consistent record of solid execution, yet trades at a discount to historical multiples and the semi group," noted Benchmark. The brokerage firm called Wall Street's estimates "conservative," and set a $114 price target on SWKS stock -- just below the equity's Nov. 6 record high of $117.65.

More recently, SWKS shares are up 18% from their late-April low near $86 to trade at $101.75. The stock is now wedged in between recent support at its 20-day moving average and resistance at its 200-day trendline, and has added 7.3% in 2018.

swks stock  daily chart june 15

Options traders have been betting on more upside for the tech shares. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), SKWS stock's 10-day call/put volume ratio of 1.76 ranks in the 76th annual percentile, meaning calls have been bought to open over puts at an accelerated pace.

Qorvo Stock Has Rallied Hard Off April Lows

For QRVO, the brokerage firm said improving margins should boost earnings, and the stock is currently trading at a discount -- setting its price target at $95. This represents a 13% premium to Qorvo's current price at $84.36, and sits in territory not charted since December 2001.

Since hitting a near-term low of $66.30 in late April, QRVO stock has surged 27%. Plus, a recent floor appears to have emerged in the $79 region, which coincides with a 61.8% retracement of the equity's fall from its mid-March two-year high of $86.84 to that April low.

qrvo stock daily chart june 15

Short sellers could help keep the wind at Qorvo's back, too. Short interest fell 10.6% in the most recent reporting period, to 7.97 million shares. However, this still represents a healthy 7% of the equity's available float, or four times the average daily pace of trading.

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