Morgan Stanley analyst Joseph Moore upgraded semiconductor and radio frequency chipmaker Qorvo to overweight from equal weight, citing the potential for a renewed earnings recovery path following the involvement of activist investor Starboard Value. Moore raised his price target by $16 to $106, suggesting a 25.9% potential upside for the stock. This upgrade comes after Qorvo shares rallied last week following the news that Starboard Value had unveiled a 7.7% stake in the company.
Morgan Stanley analyst Joseph Moore upgraded semiconductor and radio frequency chipmaker Qorvo to overweight from equal weight, citing the potential for a renewed earnings recovery path following the involvement of activist investor Starboard Value . Moore raised his price target by $16 to $106, suggesting a 25.9% potential upside for the stock. This upgrade comes after Qorvo shares rallied last week following the news that Starboard Value had unveiled a 7.7% stake in the company.
The stock is now up roughly 20.4% this year, significantly outpacing the broader market. Moore believes that Starboard's involvement could lead to operational efficiencies, such as increasing external manufacturing and focusing on cash generation from its radio frequency business. This, he argues, can drive earnings per share growth, even without a rebound in the smartphone market. Moore points out that Qorvo has struggled to achieve margin targets, but Starboard's influence could inject urgency into this area.He outlines three key opportunities for Qorvo to boost earnings growth: reducing but not eliminating internal fab usage to stabilize the company during volatile periods in the smartphone cycle and better manage gross margins; realigning operating expenses around its core radio frequency portfolio, as Qorvo's operating expenses are significantly higher than its peers; and taking advantage of Qorvo's discounted multiple and shifting use of cash return to buybacks, given the amount of customer and business concentration. While Moore's upgrade puts him in the minority, as most analysts rate the stock as a hold, his bullish stance highlights the potential for Qorvo to unlock significant value under Starboard's guidance
Qorvo Semiconductor Radio Frequency Starboard Value Activist Investor Earnings Growth Morgan Stanley Joseph Moore Stock Upgrade
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