RBC Capital raises Skyworks Solutions price target on deal approval

RBC Capital increased its price target on Skyworks Solutions stock (NASDAQ:SWKS) to $95 from $70, maintaining a Sector Perform rating. This move came after the company announced that its acquisition of Qorvo had obtained all necessary regulatory approvals, with the deal expected to close by October 5, 2026. RBC Capital views the transaction positively due to anticipated operational cost synergies and minimal overlap, despite a 15-20% RF share at each entity.

The combined business could see scale efficiencies from its diverse analog and mixed-signal businesses. However, the firm expects only a modest increase in iPhone content in 2027 as the market shifts towards internal modems, with overall smartphone growth remaining subdued. The 6G catalyst is a few years away. Skyworks' stock has risen approximately 30% in the past month, leading to a 62% gain over the past six months, but is considered overvalued by InvestingPro analysis.

The stock is among the most overvalued in the sector. RBC Capital anticipates that full operational cost synergies will materialize within 24-36 months. Skyworks Solutions reported its fiscal third-quarter results, exceeding Wall Street's expectations with adjusted earnings of $1.08 per share on $935 million in revenue, compared to analysts' estimates of $1.03 per share on $925.91 million.

Despite this strong performance, investors have shifted their focus to the company's outlook, margin pressure, and capital allocation changes. Other firms have also adjusted their price targets and ratings for Skyworks. UBS raised its target to $70 from $65, maintaining a Neutral rating, while BofA Securities lowered its target to $65 from $70, expressing concerns about the merger's execution.

BMO Capital initiated coverage with a Market Perform rating and a $70 price target, highlighting the company's position as a leading RF supplier. These developments showcase the diverse views and ongoing interest from investors in Skyworks Solutions.