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Analysts Weigh In On Qorvo Inc (QRVO) And Transocean LTD (RIG) Following Analyst Day And Earnings Release

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Analysts from Brean Capital and Cannacord Genuity weigh in on semi-conductor company Qorvo Inc (NASDAQ:QRVO) and offshore drilling company Transocean LTD (NYSE:RIG). While Qorvo had a successful analyst day, Transocean’s industry continues to suffer from declining demand.

Qorvo Inc

Analyst Mike Burton from Brean Capital weighed in on Qorvo following the company’s analyst day. The analyst is hopeful for the future of the semi-conductor company as management reinforced his positive expectations regarding the company’s growth and synergy for 2016. Burton reiterated a Buy rating with a price target of $70 for the stock. The analyst notes positive management sentiment regarding overall growth up to 2017, citing a growth model of 52.5% GM/33.5% OM, above consensus of 51%/31.5%. He also notes encouraging management perspective about the company’s “two main synergy opportunities: in-sourcing legacy TQNT products into the Company’s China facility($40-$50M annual run-rate savings coming 2H16) and in-house SAW filters.” Related, the analyst believes Qorvo can achieve its predicted model with leverage from “increasing RC complexity (highly integrated RF Fusion is fastest growing mobile category) and increased growth in IDP.”

Burton notes that Qorvo’s mobile segment is in line with forecasted growth rates, with management issuing positive guidance into the future. Related, the company presented a $1 billion market opportunity in two segments, Wifi and Diversity Receive, which are targets for the company’s first modules. The analyst believes that the company’s three largest customers, Apple, Samsung, and MediaTek, directly correlate with this opportunity. The analyst notes that management’s statement of “content growth on all the major marquee flagships for the next couple years,” directly relates to Apple, reassuring investors of the company’s shift to “multiplexers at the leading OEM (would benefit AVGO at that socket).” Similarly, he states that Samsung is the most promising opportunity for the company’s...


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