By Sarah Roden
After attending the Mobile World Conference (MWC) last week, analyst Mike Burton of Brean Capital left feeling optimistic about the developments in the sector. Burton is excited about LTE growth and wireless infrastructure development in China, though he is concerned for the future when “incremental base station builds will be predicated on capacity needs only rather than expansion.” Burton also noted that RF trends “appear favorable,” which will save costs as LTE adapts to regional devices.
Burton saw nearly 20 companies at the conference and released bullish ratings on 5 of them, making sure to note the risks of each company:
Burton rated Avago Technologies (AVGO, Financial) a Buy with a price target of $145. He noted the primary risk of the company is that its business corresponds to global macroeconomic demand and “competes in some highly competitive markets that have short product cycles.” Consequently, AVGO has to “compete to win sockets every year to be successful.” Lastly, the analyst noted Avago’s “lack of visibility due to ‘hubbing’ arrangements at top customers can lead to inventory builds and subsequent work downs which can increase earnings volatility.”
Mike Burton has rated Avago 7 times, earning a 60% success rate recommending the stock with a +20.1% average return per AVGO recommendation.
The top analyst consensus for AVGO on TipRanks is Strong Buy.
Burton rated Marvell Technology (MRVL, Financial) a Buy with a price target of $17. He noted three announcements the company publicized at the conference: Marvell’s deal with Samsung’s J1 LTE platform; Marvell’s announcement of the ARMADA, a LTE modem; and a Final-Level Cache (FLC) technology that will save memory space in DRAMs.
Risks of MRVL include the company’s “high exposure to PC end market, and HDDs in particular.” Consequently, any change in “the markets for PCs could impact TXN's build plans.” Lastly, Burton noted MRVL’s intense competition, noting that the company’s ability to keep up with its “competitors road maps will be critical to its success in the end market.”
Mike Burton has rated Marvell 9 times, earning a 88% success rate recommending the stock with a +8.0% average return per MRVL recommendation.
The top analyst consensus for MRVL on TipRanks is Moderate Buy.
Burton rated Qualcomm (QCOM, Financial) a Buy with a price target of $80. The analyst noted, “QCOM has historically traded at a fairly large premium to other Semi manufacturers due to high operating margins that come from the licensing business. However, given the uncertainty of the last few quarters, QCOM has been trading at a discount to Semis.” He continued to list QCOM’s risks, including its dependence on the handset market; “traditional Computing sector manufacturers… aiming for a bigger presence in mobile;” and legal risks associated with its licensing program.
Mike Burton has rated Qualcomm 6 times, earning a 67% success rate recommending the stock with a +7.1% average return per QCOM recommendation.
The top analyst consensus for QCOM on TipRanks is Moderate Buy.
Burton rated Qorvo (QRVO, Financial) a Buy with a price target of $85. The analyst noted that QRVO’s “Customer concentration… will likely drive near-term results, though we expect Chinese OEMs to account for an increasing [percentage] of revenues going forward.” Burton highlighted several risks associated with QRVO including: “Integration risks which may lead to the Company missing operating targets or struggling to maintain volume while transitioning facilities; Failure of 3-way NDAs to lead to revenue generating products; and Design-win loss to competitive solutions from SWKS, AVGO, Murata, etc.”
Mike Burton has rated Qorvo 7 times, earning a 75% success rate recommending the stock with a +4.6% average return per QRVO recommendation.
The top analyst consensus for QVRO on TipRanks is Moderate Buy.
Lastly, Burton rated Skyworks Solutions (SWKS, Financial) a Buy with a price target of $92. On a macro level, Burton noted that “SWKS sells the majority of its products into the Mobile Devices end market which is subject to consumer buying behavior.” In addition, “SWKS outsources some of its production so it may be prone to” supply chain disruption. Lastly, “SWKS competitors may become aggressive on pricing in an attempt to gain share from SWKS successfully, and/or create an adverse pricing environment for SWKS products.”
Mike Burton has rated Skyworks Solutions 9 times, earning a 100% success rate recommending the stock with a +75.2% average return per SWKS recommendation.
The top analyst consensus for SWKS on TipRanks is Moderate Buy.
Mike Burton has a 75% overall success rate recommending stocks with +21.2% average return per recommendation.
To see more recommendations from Mike Burton, visit TipRanks today.
