BARRON'S
Published: Aug. 4, 2022 at 12:36 p.m. ET
By Tae Kim

The wireless-chip company Qorvo isn’t out of the woods yet, analysts say, as global demand for smartphones weakens.

KeyBanc Capital Markets analyst John Vinh reiterated his Sector Weight rating for Qorvo (ticker: QRVO ), citing the worsening outlook for chip sales. In early trading Thursday, the stock fell 2.5% to $104.25, while the S&P 500 was nearly flat.

On Wednesday, Qorvo reported slightly better-than-expected June quarter results. But on a conference call to discuss the numbers, management told analysts it now expects the company’s revenue for the second half of the fiscal year to be down 10% versus the first half, a gloomier call than Wall Street expected.

“Android (China/ Samsung ) inventory correction goes from bad to worse” for Qorvo, Vinh wrote. “We see the stock as fully valued.”

The analyst noted that Qorvo lowered its forecast for 2022 sales of 5G handsets across the industry to 625 million phones from 662 million. China’s lockdowns to fight Covid-19, the Russia-Ukraine war, and rising inflation are hurting smartphone sales.

Similarly, Susquehanna analyst Christopher Rolland reaffirmed his Neutral rating on the chip maker. “While the long-term picture appears favorable, potentially declining global handset units and macro/trade/China issues keeps us sidelined in the near term,” he wrote.

Qorvo shares have fallen by roughly 33% this year, while the iShares Semiconductor ETF (SOXX), which tracks the performance of the ICE Semiconductor Index, has declined 23%.

Write to Tae Kim at tae.kim@barrons.com