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AF. Bauer Initiates Coverage of Skyworks (SWKS)
Research analysts at AF. Bauer. AF. Bauer started coverage on shares of semiconductor manufacturer, Skyworks Solutions Inc. (SWKS). In a report released on Monday the brokerage firm rated Skyworks stock at neutral with a price target of $88, reflecting an approximate 12% upside from the stock’s trading price of $78.46 as of Monday afternoon.

Semiconductor Manufacturer Diversifies Revenue with IoT

The Woburn, Mass.-based tech company supplies analog and mixed-signal semiconductors to Apple Inc. (AAPL) as well as Samsung and other manufacturers. While Skyworks has attempted to diversify its revenue streams, the company still relies heavily on its main customer, Apple, which accounts for 40% of the semiconductor businesses’ sales.

Given the risk of depending on an uncertain mobile phone market and disproportionately large customers, Skyworks has leaned away from its traditionally core IMS (integrated mobile systems) business. Investors see long-term growth potential in the company’s expansion in the emerging markets for wearables, connected cars and other Internet of Things (IoT) devices. According to a McKinsey study, IoT is expected to to generate up to $11 trillion a year in economic value by 2025. As Skyworks beefs up its IoT presence, including the announcement of a new design and research center in San Diego, the company will continue to develop for markets and applications such as automotive, medical, smart energy and wearables. Skyworks’ stock has increased 20% in value over the most recent three-month period, reflecting a current market cap of $14.71 billion trading at a price to earnings ratio of 15.54. Analysts’ predict Skyworks’ one-year estimated price target of $84.22

and a quarterly earnings-per-share post of $1.43, down from this most recent quarter’s $1.52 EPS. Analysts predict revenue to increase acutely this year (less than 1%), later targeting a 7.5% revenue growth for 2017, and a 17% earnings growth in the five years proceeding. Skyworks is slated to report Q4 earnings on Nov. 3 after market close.

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Andreas F Bauer, a Dutch Investment Firm , Licensed and Authorised by the Dutch Authority for Financial Markets (AFM), under license number 12042561

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